Fri, Jan 07, 2000 - Page 17 News List

High-speed rail talks may finish
by month's end

By Shirley Sun  /  STAFF REPORTER

The Taiwan High Speed Rail Corp (THSRC, 臺灣高鐵) expects to finalize a deal with Japan's Taiwan Shinkansen Consortium (TSC, 臺灣新幹線企業聯|X) by the end of this month.

Negotiations on the supply of NT$95 billion in train carriages and locomotives are set to begin Monday.

"We hope that the deal can be finalized as soon as possible," said Nita Ing (殷琪), chairman of the THSRC. "And by the end of this month should not be a problem."

In addition, Ing said, the Japanese consortium is also expected to join the rail company's board. "However, their holdings of the company's total stock will not exceed 10 percent," Ing said.

The Japanese consortium in late December beat a competing European rival, which had a two-year relationship with the THSRC. According to Ing, choosing Japan to build Taiwan's first high-speed rail system was for multiple reasons.

"It was a professional decision taking into account different considerations, including technological and financial terms," Ing said. "Price [of the electric machinery equipment] is an important factor."

According to the Japanese daily Yomiuri Shimbun, Jap-anese banks -- including a government-run lender -- will loan ?300 billion (US$2.9 billion) to support the construction of the high-speed railway.

Another cost-saving factor has been the recent rise of the NT dollar against the greenback. According to a local newspaper report, the NT dollar's appreciation will save the THSRC about NT$18 billion in risk reserves.

In terms of overall financing for the project, Ing said: "We are expecting to sign an agreement with a domestic banking consortium also by the end of this month."

"Currently, we are actively contacting insurance companies to invest in the company's equity."

More than 32 banks in Taiwan last November formally expressed an interest to lend roughly NT$450 billion to the THSRC. The amount was considerably more than the NT$308.3 billion that was requested.

The project has an estimated cost of NT$446.4 billion (US$14.2 billion).

"There have been some foreign investors interested in making an investment in our project," Ing said.

T.C. Kao (高聰忠), vice president of the THSRC's construction management group, said 11 land construction bids should all be finished by April.

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