Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) yesterday reshuffled its 15-member board at a shareholders’ meeting, with government-appointed representatives taking up nine seats — including three seats for external directors — while five of the railway project’s original shareholders retained their seats.
The newly elected board made former CEO Ou Chin-der (歐晉德), who replaced former chairwoman Nita Ing (殷琪) in late September, its new chairman with a three-year term.
The government-appointed board members include Pan Wenent (潘文炎), representing the CTCI Foundation (中技社), and Hu Mao-lin (胡懋麟), chairman of the state-owned Taiwan Sugar Corp (台糖). Academics Lin Chen-kuo (林振國), George Chen (陳世圯) and Victor Liu (劉維琪) were appointed as independent directors.
During its shareholder meeting yesterday morning, Ou said he would turn around the company’s financial performance by coming up with a healthier operational plan, boosting passenger traffic and negotiating new loans at lower interest rates.
In response to shareholders’ questions, Ou said the company needed more than 140,000 passengers per day to break even, from its current average of 87,000 passengers per day.
He also addressed recent concerns about the company’s highly paid foreign executives, some of whom he said have submitted their resignations in the wake of criticism over their high salaries.
Ou said the company hoped to retain the foreign executives, who made up just 2.6 percent of the company’s total workforce as of August, down from 3.7 percent last year and a reduction of more than 30 percent from the project’s early years.
These executives, whose salaries accounted for 1.9 percent of the company’s total personnel expenditure, remain indispensable to daily operations, especially the railway system’s maintenance, which is of great importance to passenger safety, he added.
The foreign executives are highly sought-after by railway contractors in other countries and have been offered up to double the salary they earn at THSRC, Ou said.
Nevertheless, he said the company would gradually reduce the number of foreign executives by June.
A company source, who declined to be identified, yesterday said the company was expected to negotiate terms including interest rates and maturities with creditor banks including its main lender, Bank of Taiwan (台灣銀行), to finalize a NT$382 billion (US$11.8 billion) syndicated loan “by the end of this month or no later than the year’s end.”
For its government-funded loan of NT$308.3 billion, the company hopes to pay a floating interest rate that would be pegged to the rate for one-year postal deposits and would be slightly lower than the averaged rate of 2.6 percent on its old loans, the source said.
A fixed rate of 0.8 percent on top of the rate for one-year postal deposits, currently at 1 percent, would be levied on the remaining loan of NT$73.7 billion, the source said, adding that the company was further negotiating for a ceiling on the rates if they were to be substantially increased.