Sat, Jan 15, 2000 - Page 17 News List

Lee won't get involved in THSRC spat


President Lee Teng-hui (李登輝) told the key executive from the Eurotrain consortium yesterday that he couldn't help the group suspend negotiations between a Japanese competitor and the local consortium building Taiwan's first high-speed railway.

Heinrich von Pierer, chairman of Germany's Siemens AG, is in Taiwan trying to reverse the Taiwan High-Speed Rail Corporation's (THSRC, 台灣高鐵) decision to give the priority negotiating rights to the Japanese Shinkansen group.

Pierer lobbied Lee a day after Eurotrain announced that it has asked a Taipei court for an injunction to suspend the rail talks.

But Lee told Pierer the competitive bidding was a matter between businesses and he could not get involved, the Presidential Office said in a statement.

Eurotrain has been vying for the railway since 1997. The 345-kilometer system would link the cities of Taipei and Kaohsiung.

Despite lengthy negotiations with Eurotrain, the THSRC awarded priority negotiating rights to the Japanese group on Dec. 28.

There had been rumors that THSRC favored Shinkansen over Eurotrain because the Taiwan government wants to forge closer ties with Japan, but THSRC had denied there were political factors.

However, Eurotrain said it has a binding agreement with THSRC and the Taiwanese company violated that agreement by talking to the Japanese.

Eurotrain wants to provide the main hardware for the rail system, estimated to cost NT$430 billion (US$13.5 billion).

THSRC had reacted strongly to Eurotrain's legal action and vowed to continue negotiations with the Shinkansen group.

Edward Lin (林天送), spokesman for the THSRC, has denounced Eurotrain's action as ``a commercial ploy'' and ``inappropriate pressure.''

The Shinkansen group is led by Mistui & Company and comprises Mitsubishi, Marubeni, Sumitomo, Mitsubishi Heavy Industries, Toshiba, and Kawasaki Heavy Industries.

Construction of the high-speed rail system is set to start next spring and is scheduled to make its first run Oct. 31, 2005.

In related news, THSRC has hired Bank of America Corp to advise the company in its international negotiations to buy railway equipment.

The biggest US bank will assist the company in negotiations for the purchase of trains and control systems for the rail construction project.

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