The Taiwan Railway Administration (TRA) is scheduled to sign a contract with Kindom Construction Corp (冠德建設) this month for a development project at Banciao Station in Taipei County.
The construction firm won the tender for the development project in November last year.
Like Taipei Main Station, Banciao Station accommodates the nation’s three main railway systems — the TRA system, the Taiwan High Speed Rail system and the Taipei Metropolitan Rapid Transit (MRT) system.
Construction at Banciao Station will be the second TRA project outsourced to the private sector using the renovate-operate-transfer (ROT) model.
The TRA signed its first ROT contract for a project at Taipei Main Station in which the Breeze Group (微風集團) won a tender to run the food court on the second floor of the railway station. Aside from NT$60 million (US$1.7 million) in royalties, Breeze also has to pay the TRA annual rent of NT$50 million.
The railway firm’s contract with Kindom will give the construction company exclusive rights in using the Banciao Station basement, as well as the second, 24th and 25th floors for 12 years, making the deal twice the size of the project at Taipei Main Station.
Lai Qiu-jin (賴秋金), general manager of the TRA’s freight service department, said six previous bids had fallen through, prompting the TRA to reduce the royalty fee from NT$70 million to NT$25 million and cut the annual rent from NT$60 million to NT$25.2 million.
The contract stipulates that if the company’s revenue were to exceed NT$50 million, the TRA would be entitled to a share of the profit. Because of the economic downturn, the TRA agreed to extend the renovation period from six months to a year. It will not charge Kindom any rent during the renovation period.
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