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Infrastructure investment to reach NT$400 billion

The government plans to spend NT$400 billion (US$12 billion) in the next four years building railway lines and expanding ports to improve the nation's public infrastructure, according to the transport ministry's budget.

Spending on new railway lines and mass-transit transit (MRT) networks will cost about NT$211.3 billion over four years, according to a budget paper obtained by reporters. About one-third of the budget, or NT$133.9 billion, will be to build new berths and improve the facilities in five ports in Kaohsiung and Keelung.

Taiwan's economy may expand 5.9 percent this year, according to a government forecast, the fastest annual pace since the 1997 Asian financial crisis. Demand from China, Japan and other markets are helping AU Optronics Corp (友達光電) and chipmakers like Taiwan Semiconductor Manufacturing Corp (台積電) bolster their exports.

"The spending plan will help stimulate" economic growth, said Tu Jin-lung (杜金龍), who oversees the equivalent of US$6 million for private clients at Taipei-based Grand Cathay Investment Services Co (大華投信), a unit of Grand Cathay Securities Corp (大華證券).

"Taiwan's steel and cement industries will benefit" as the infrastructure projects boost demand for the building material, Tu said.

An improved transportation infrastructure will enable traveling to be speedier, giving bolstering the movement of foodstuff and tourists, Tu said.

The government has allocated about 5.6 percent of next year's expenditure budget to enhance the nation's transport network. The government is also enhancing ports to cut shipping time, attract freight lines and compete with the ports of Hong Kong, Shanghai and South Korea's Busan.

Taiwan Cement Corp's (台泥) shares fell 0.5 percent to NT$19.00 after rising as much as 2.6 percent to a seven month-high of NT$19.60.

In addition to the new projects, Taiwan is also spending NT$461 billion through government spending and private funds to build a high-speed rail line from the north to the south.

"We're linking the transport systems of major cities" to make commuting easier, Transport Minister Lin Ling-san (林陵三) told reporters. "We also welcome foreign investors to take part" in some of the railway projects and the ports, he said.

Taiwan's so-called bullet train service, due to begin operating by the end of October next year, can travel at an average speed of 200kph and cut traveling time between Taipei and Kaohsiung by two-thirds to 90 minutes.

The government plans to build a new MRT network in Kaohsiung City, adding to the nation's sole metro system in Taipei. Taiwan Railway, the 117-year-old network that links the nation's north and south will be enhanced to make it into a metro system, Lin said.

Investors will also be invited to take part in a NT$21.6 billion project to build a rail line connecting Taipei with the northeastern resort town of Chiaohsi, Lin said.

Other projects include a highway along the western coast and roads linking CKS International Airport with neighboring towns.

The government will also tap private funds for a NT$12 billion container terminal in Kaohsiung port, with the government spending an additional NT$23.2 billion acquiring land, Lin said.

"Kaohsiung port will be busier in the future," he said. "We can't wait until the port is already too crowded."

The government has been trying to promote Kaohsiung as a trans-shipment port for the region, as its deep waters can accommodate larger ships than most Chinese ports.

"Containers from the China can be placed in larger ships at Kaohsiung," Lin said.

The port is now designated as a ``free port,'' where tax incentives are offered and no visas are needed, he said.

The government has also been calling on the Chinese authorities to talk on lifting the ban on direct transportation links with China to make the Kaohsiung port more attractive to shipping lines.
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