Transportation chief refuses to extend THSR concession
By Joy Lee ,The China Post
December 28, 2013, 12:05 am TWN
TAIPEI, Taiwan -- Transportation Minister Yeh Kuang-shih (葉匡時) yesterday said that he could not approve a request from Taiwan High Speed Rail (THSR) to extend its concession period, since such an action might profit the firm's original shareholders.
THSR Chairman Ou Chin-der (歐晉德) said on Thursday that if the government extended the concession period, ticket prices could be decreased by over 10 percent.
Yeh said during a radio interview yesterday that THSR has experienced too many technical issues this year, which resulted in a rise of public doubts over THSR's stability.
According to Yeh, he already demanded that the Bureau of High Speed Rail establish a team to monitor THSR, and, when necessary, invite international experts to inspect THSR's systems and determine whether they can or should be improved.
“It has been almost seven years since the launch of THSR, so now is the time to invite experts who are not from THSR to inspect the system from a different perspective again,” said Yeh.
“When the government announced that it would recruit companies to invest in the construction of the THSR's build-operate-transfer (BOT) project, the contracted concession period was 35 years,” said Yeh. “The main issue that THSR is facing is that the original shareholders did not invest enough in the project, which forced the firm to take out a loan and resulted in the unstable financial structure of the firm.”
Yeh said that what THSR should do now is to pay off the over NT$50 billion debt and then invite new investors to join the firm.
“After new investors join THSR, the government can discuss with the firm the extension of the concession period, and allow the public to share the benefits of THSR,” said Yeh.
“I oppose the request to approve extending THSR's concession period at this time in order to decrease the ticket prices because it could only profit the firm's original shareholders instead of the public,” said Yeh.
According to the BOT project contract between the government and THSR, the concession period for THSR is 35 years, which means THRS's right to operate will be transferred to the government in 2033.
THSR submitted a proposal to the Transportation Ministry earlier this year, hoping to extend the concession period from 35 years to 99 years, but the ministry has not yet approved the change.