Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) could have difficulty getting its hands on a NT$15.8 billion (US$481.3 million) loan from US investment bank Lehman Brothers given government concerns that it may involve funds from China.
"We have followed the rules in applying for the loan ... We can only wait for the government's final decision," THSRC spokesman Arthur Chiang (
THSRC, the operator of the nation's high speed rail, secured a NT$65.5 billion syndicated loan from Lehman Brothers and seven local banks, including Taipei Fubon Bank (台北富邦銀行), Taishin International Bank (台新銀行) and Fuhwa Commercial Bank (復華銀行), in May.
Of the total, Lehman Brothers will provide NT$15.8 billion, with THSRC using the right to develop five major stations -- Taoyuan, Hsinchu, Taichung, Chiayi and Tainan -- for 50 years as collateral for the loan.
As Lehman Brothers and IBM Corp had established a China Investment Fund with an initial capitalization of US$180 million last October, some Taiwanese officials have voiced concerns that the loan might involve Chinese funds, allowing China to control the right to develop THSRC stations, the Chinese-language China Times reported yesterday.
Chinese investments are banned in Taiwan.
The Ministry of Transportation and Communications has yet to make a decision on the case, the report said.
Despite the snag, operations at the high-speed rail remained normal, it added.
"We are still alive," Chiang said.
THSRC chairwoman Nita Ing (殷琪) said during a ceremony last month to announce the syndicated loan agreement that she hoped the company would break even in the third quarter.
The bullet train system posted revenues of NT$1.03 billion and NT$1.15 billion in April and May respectively. Chiang refused to reveal sales for last month, saying THSRC was only required to report the figure to the Bureau of Taiwan High Speed Rail.
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