Government grants funds for high-speed rail project

Taiwan High Speed Rail Corp (台灣高鐵) turned to government financing after failing to secure NT$30 billion (US$856 million) in export credits from Japanese banks to buy equipment for a 345km high-speed line between Taipei and the southern city of Kaoshiung.

The credit fell through after Taiwan banks showed no interest in providing necessary guarantees for the loans, the company said. The Taiwan government agreed to dip into three state-run insurance and pension funds to provide the financing at market rates. The company is seeking an additional NT$40 billion from banks for the project, said company spokeswoman Corinna Fu (傅虹).

"Taiwanese banks aren't familiar with export credits and showed lackluster interest in providing guarantees," she said.

The state-owned Taiwan railway builder and operator awarded the first equipment contracts for the nations's first high-speed magnetic-levitation line to Japanese companies in December 2000.