Wed, Sep 07, 2005 - Page 10 News List

THSRC says high-speed rail runs late

CAN'T DELIVER Taiwan High Speed Rail Corp announced yesterday that the nation's first bullet-train system has been put on hold by core-system construction problems


Taiwan's first high-speed rail system will not start service at the end of next month as scheduled, as construction of its core mechanical and electrical system has fallen seriously behind schedule, the company managing the project said yesterday.

"We will announce the new timetable after a meticulous evaluation by our board members," said Ted Chia (賈先德), an associate manager of Taiwan High Speed Rail Corp (THSRC, 台灣高鐵).

At the end of July, THSRC had completed 87.89 percent of the 345km track, 92 percent of station constructions and only 60.44 percent of the core mechanical and electrical system, which has become the major cause for the postponement, Chia said.

The core mechanical and electrical system may be completed only by September next year, according to a Chinese-language newspaper report. In addition, THSRC needs at least two months of trial operation and five months of inspection by the Taiwan High Speed Rail Bureau, under the Ministry of Transportation and Communications. As a result, the high-speed railway may only be launched 18 months after the originally planned date.

While demanding that the Japanese-led Taiwan Shinkansen Corp (TSC, 台灣新幹線) -- contractor for the core mechanical and electrical system's construction -- accelerate production, THSRC also plans to demand that the Japanese consortium abide by the terms of the contract. According to the contract, in the event of falling behind schedule, TSC would have to pay THSRC NT$200 million per day in compensation and to cover interest losses until the construction is completed, a Chinese-language news report said yesterday.

The report also said that TSC has proposed additional terms when THSRC requested it to speed up construction.

The consortium of seven Japanese companies -- Mitsubishi Heavy Industries Ltd, Toshiba Corp, Kawasaki Heavy Industries Ltd, Mitsui & Co, Mitsubishi Corp, Marubeni Corp and Sumitomo Corp -- won the contract for this project in 2000.

The report, citing company supervisor Huang Che-hung (黃哲宏), said that the THSRC board will refuse TSC's "unreasonable requests" and will have a meeting today to determine the extent of the consortium's responsibility.

Chia yesterday confirmed that TSC made additional requests, but said the content of the contract and the terms should remain confidential. Chia declined to comment on the amount of NT$200 million compensation per day, saying the number is merely an estimate touted by the media.

He did not comment on suggestions in the report that the postponement was ultimately the product of a long-standing disagreement between THSRC and TSC over certain technical problems associated with the core mechanical and electrical system. He said that the two companies are negotiating a solution to these problems.

Jack Hsu (許俊逸), a deputy director general of the Bureau of High Speed Rail, said the bureau has not yet received THSRC's formal notice about the postponement. He said the company needs to absorb the losses incurred by the delay itself, since it is a build-operate-transfer project.

According to the contract, THSRC needs to return the transportation facility to the government 35 years after the contract was signed in July 1998, Hsu said.

THSRC previously estimated that it can show ticket revenue of about NT$130 million per day during the initial stages of operation. Since the project has been delayed, it means it will now take longer for the company to break even.

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