Cabinet passes amendment about THSR takeover issue
By Lauly Li ,The China Post
June 20, 2014, 12:08 am TWN
TAIPEI, Taiwan -- Should the Taiwan High Speed Rail (THSR) fail to improve its financial structure at the end of this year, the government will take over its management in accordance with an amendment passed yesterday in the Executive Yuan, Cabinet spokesman Sun Lih-chyun (孫立群) said yesterday.
The Executive Yuan yesterday passed the amendment to the Act for Promotion of Private Participation in Transportation and Communication Infrastructure Projects. The amendment stipulates that if projects encounter financial or other major difficulties, the government is entitled to take over their management under certain circumstances. The amendment was later sent to the Legislative Yuan for further deliberation, Sun said.
The spokesman said in a press conference that one of the purposes of amending the law is to offer a legal basis for the government to take the helm should the THSR still not have its finances in order by the end of this year.
Transportation Deputy Minister Chen Jian-yu (陳建宇) noted that although his ministry currently has a set of regulations governing the takeover of private firms' management of public infrastructure projects, the public still has concerns over the procedure. Chen said the Ministry of Transportation and Communications (MOTC) hence decided to amend the law, adding terms and conditions for such a course of action.
The deputy minister went on to say that the THSR is simultaneously drafting plans to improve its financial health, saying that the firm will propose a financial restructuring plan to the MOTC.
The MOTC will discuss and negotiate with the THSR, Chen said, and if the firm can successfully solve its financial problems then the government will not be taking over its management.
Chen said, however, that if the government does eventually have to take over the company, it can do so in accordance with the amendment. He stressed that the amendment is not just meant for the THSR, explaining that is applicable to any future Build-Operate-Transfer projects.
According to the amendment, when a public transportation corporation is facing financial crisis, it has to yield the running of it to the MOTC to prevent issues such as improper transfers of its debt.
The owner of the firm and its employees should obey the MOTC's orders when the ministry takes over management. The corporation will face maximum fines of NT$25 million should it violate the MOTC's orders, the amendment states.