Water problems highlight need for infrastructure funds

Manufacturers in the Taoyuan area warned that the government should improve infrastructure, mainly supplies of energy and water, which are crucial to industries, or the nation may gradually lose its edge in attracting investments.

"We thought about moving the factory to another area a long time ago because this [water shortage] is a long-lasting problem in Taoyuan, but we have nowhere to go," said a finance official at Wafer Works Corp (合晶科技) who spoke on condition of anonymity.

The Hsinchu Science Park (新竹科學園區), the nation's Silicon Valley, has encountered serious water shortages during the dry season in recent years, the official said. He said the developing Southern Taiwan Science Park (南部科學園區) in Tainan and Central Taiwan Science Park (中部科學園區) in Taichung will also face the same plight sooner or later.

"If the government fails to resolve the issue, companies will have second thoughts before investing in the nation," he said.

As of Tuesday, there were 347 manufacturers in the Taoyuan area affected by water shortages over the past 17 days reporting a total of NT$4.3 billion in losses, according to statistics compiled by the Industrial Development Bureau. The figure includes reductions in production and extra costs from trucking in water.

The high-tech industry, especially chip makers and liquid crystal display (LCD) makers which require a large volume of water to maintain operations, saw losses of NT$2.64 billion, according to the bureau.

Major companies in the region include Nanya Technology Corp (南亞科技), flat-panel makers Chunghwa Picture Tubes Ltd (中華映管) and HannStar Display Corp (瀚宇彩晶), and Quanta Computer Inc (廣達電腦), the world's biggest notebook computer maker.

During this period, most manufacturers hired trucks to transport water from nearby counties to maintain production. The government has pledged to fully resume water supplies several times, but as of yesterday, only one-third of the normal water supply was being pumped to Taoyuan residents and companies.

Unlike victims of natural disasters, who can apply for government compensation or tax breaks due to property damage, the affected manufacturers can only absorb the extra costs and keep their fingers crossed.

"We don't expect any compensation from the government, but we are hoping they will stabilize water supplies as soon as possible," said James Wu (巫俊毅), acting spokesman for Chunghwa Picture, the nation's third-largest maker of liquid-crystal displays (LCDs).

Wu said Chunghwa Picture was still transporting water yesterday at a cost of NT$2 million per day. Like Wafer Works, Wu said his company can hardly move somewhere else due to shortages of water and also of land.

To keep industries from moving overseas, Wu said, the government should start infrastructure projects to channel water and energy from western and southern Taiwan, areas that are rich in those resources.