Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) yesterday announced a three-month delay for their plan to raise NT$7.5 billion by the end of 2004.
Despite the fact the delay may dampen the prospects of a long-awaited bullet train service, the company stressed that the postponement will not make an impact on the construction timetable.
The 345km line that will run between Taipei and Kaohsiung is scheduled to start operations in October. With a speed of 300kph, the bullet trains will cut travel time between the two cities down to an hour and a half.
The company said that they will convene with shareholders to discuss strategies on how to pool together the necessary investment funds. According to the company, its initial stock sale failed to collect sufficient funds because its major investors are still waiting for capital inflow.
In 2002, the company's shareholders authorized the THSRC to sell stocks to pool a NT$50 billion fund. Currently, the company is still falling short by NT$9.4 billion. The company said they will come up with a new plan to collect the funds after reporting the delay to the banks.
According to the THSRC's original timetable, the company is slated to raise NT$5.5 billion by September and NT$15.5 billion by December.
The company will also need NT$7 billion by June next year. The company did not disclose whether the three-month delay would trigger a string of postponements in its subsequent plans.
Construction of the north-south bullet train project has jumped from NT$375.5 billion to NT$460.9 billion since 1999, mainly as a result of changes to the track design and terrain, Lee Sheau-jin (李曉金), chief financial officer of THSRC, said in September.
The company had to seek government permission to increase its debt ratio to raise funds for the rail project, or it would cause significant management risks.
The Council for Economic Planning and Development in August agreed that the THSRC only has to raise 25 percent of the total funds to get loans, lowering the figure from 30 percent.
The remaining 75 percent is to be made up of bank loans.