Taiwan High Speed Rail Corp (THSRC, 台灣高鐵), which is building the nation's first high-speed rail system, reiterated yesterday that it would not delay train tests set for September nor the launch of the service in October next year.
The company made the remarks in response to a Chinese-language newspaper report that THSRC is seriously behind schedule in raising funds for the 345km high-speed rail link between Taipei and Kaohsiung.
"We have no plan to make any change to our timetable at this point," Arthur Chiang (
THSRC in December announced a NT$21.7 billion fund-raising plan for the project through the sale of preferred shares to a designated group of investors including banks, trust companies and THSRC's board members.
According to its original plan, THSRC needs to collect NT$10 billion by the end of this month and another NT$11.8 billion by the end of May. However, it has so far raised just NT$1.4 billion.
If the company fails to raise the funds, it will likely find it difficult to arrange loans from banks to support the construction of the bullet train.
Chiang dismissed such speculation, saying the company had enough money to continue work until the end of May.
Five major shareholders -- including Continental Engineering Corp (大陸工程), Teco Electric and Machinery Co (東元電機) and Evergreen Marine Corp (長榮海運) -- will contribute NT$4.3 billion as required in the contract, he said.
While Chiang played down suggestions that fund shortages could slow construction work, a transportation expert said the negative coverage of the high-speed rail project could dampen investors' interest.
"They need to claim responsibility themselves ... they were overly optimistic about the project in the beginning and overlooked some problems," said a transportation professor at the National Chiao Tung University, who wanted to remain anonymous because some THSRC managers used to be his students.
One major oversight was an erroneous evaluation for land between Taoyuan and Hsinchu, which started sinking after construction began, the professor said. Such errors and disputes over land purchases have cost the company more than expected, he said.
Ho Nuan-hsuan (
The total cost for the project is now estimated at NT$513.3 billion, Ho said, compared with NT$450 billion the rail company originally calculated. The overruns will be financed by THSRC, he added.
The transportation professor said an increase of NT$50 billion in the budget was within a reasonable range, especially considering the rising prices of construction materials such as steel and gravel.
Unaffected by the fundraising problems, THSRC shares rose 14.52 percent to NT$12.7 per share yesterday on the Emerging Stock Market (
THSRC shares were hovering between NT$5 to NT$7 per share until it unveiled its newly completed passenger cars in Japan last month, which boosted the shares to above NT$10.
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