Transportation giant Bombardier Inc is shrugging off past failures in Taiwan and has placed top priority on winning an expansion contract for the Taipei Mass Rapid Transit system, according to a senior executive yesterday.
Patrice Pelletier, president of Total Transit Systems of Bombardier Transportation, told the Taipei Times yesterday that his company's strong ability to provide financing for the project could be a significant factor for its future success in Taiwan.
Bidding for the 26.1km line that will link Chungho in Taipei's south with Hsinchuang in the southwest and Luchou in the capital's north, will open early next year, according to the Taipei City Government. The line will likely be operational before 2009.
Canada-based Bombardier will be vying for the provision of the electrical and manufacturing contract, which calls for the the construction of the rail carriages and propulsion and operation system and is expected to be worth around US$700 million.
While it is unclear as to how the Taipei City Government will require the financing for the so-called Hsinchuan-Luchou line to be arranged, Pelletier said Bombardier's strength lies in its ability to raise money.
"One of the key aspects ... is our ability for project financing," said Pelletier, who is in Taipei to attend an international symposium on metro systems.
"One of the primary reasons for this ability is our wider reach. We have manufacturing facilities in 24 countries and we have a presence in 30 countries and we have access to financing sources from so many different export credit agencies like in Canada and the European Commission," he said. "That brings a lot of agility that the client will see."
The government has come under strong criticism recently for going to the aid of the Taiwan High Speed Rail Corp (THSRC, 台灣高鐵), which is building a superfast train system linking the north and south.
Although the world's largest build-operate-transfer project, THSRC has consistently had problems in raising capital for the massive undertaking, turning to the government to increase its investment.
While conceding that some degree of government investment is needed in BOT projects, Pelletier said that careful selection of partners and planning can avoid altering the deal once work is under way.
"When Bombardier puts a proposal on the table that's where the buck stops," he said.
"We analyse all the costs and if we put a proposal on the table it is going to be very clear what is our expectation in terms of government assistance or guarantees," he said.
In a speech to be delivered today at the symposium, Pelletier says "by working in partnership with the private sector, investment dollars can be raised over and above the funds available from public budgets."
Pelletier provides the Las Vegas Monorail, which Bombardier is currently building, as an example of a project totally financed by the private sector. He said that eight competing hotels, along with other contractors and investors, joined forces in the deal at an estimated cost of US$650 million.
However, subsidies or permission to generate revenue from auxiliary businesses linked to the project can be substitutes for direct government investment, he added.
If Bombardier was to win the contract -- which also includes separate civil construction contracts, some of which are already underway -- it would bring to an end a string of failures for the company here in Taiwan.
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