Corruption allegations more bad news for science park

By Dan Nystedt  /  STAFF REPORTER

Wed, Jan 03, 2001 - Page 17

News over the holiday weekend that Hsinchu officials were charged with allegedly extorting money from science park firms couldn't come at a worse time as the nation is currently in a battle to slow down a high-tech exodus abroad.

Even if the allegations are proved false, the psychological damage has already been done to the Hsinchu Science-based Industrial Park (新竹科學園區), still reeling from a series of power failures over the past few months. Many of the park's big players are currently eyeing China's lucrative markets or already investing across the strait.

The city of Hsinchu's Prosecutors Office last Saturday charged Hsinchu Mayor Tsai Jen-chien (蔡仁堅), Chief Secretary Huang Ching-lung (黃慶隆) and the director of the Hsinchu Environmental Protection Agency (環保局), Liu Chia-chun (劉佳鈞) with forcing companies inside the park to contribute NT$3.9 billion to a city fund developed in 1999 set up to aid local construction projects.

"[Fees like that] may be why United Microelectronics Corp (UMC 聯電) is investing in Singapore and not in Taiwan," said one analyst who requested anonymity.

In August 1999 the city government of Hsinchu created the NT$3.9 billion fund to pay for infrastructure projects around the industrial park. Under the plan, companies operating in the park were supposed to contribute "donations" to the fund.

Companies in the park who refused to "donate" frequently received fines from the city's Environmental Protection Agency -- intimidation tactics -- according to media reports. Companies who reportedly received fines quite often include UMC, Macronix International (旺宏電子) and Winbond Electronics (華邦電子).

In an example of how the alleged "donations" were collected, UMC, the nation's second largest semiconductor foundry, was told to stop production at its 8E semiconductor fabrication plant last May while the Environmental Protection Agency conducted an "environmental impact assessment" of its operations.

The agency said UMC had not conducted an assessment before beginning full production at the plant.

At the time of the order, a UMC spokesman said the suspension of production at the 8E plant would cost the company NT$50 million per day in losses. Another anonymous industry insider claims the situation was only rectified after UMC donated to the city's NT$3.9 billion fund.

Problems between the Hsinchu city government and companies in the industrial park have been ongoing for the past year. T

But the Hsinchu city government believes it has a right to charge extra fees to companies inside the park in return for providing basic infrastructure such as roads and public transportation links. The three officials named in the suit have denied any wrongdoing and expect to be exonerated of all charges.

Since January last year, companies in the park have been hit by over 40 blackouts, costing park firms hundreds of millions in NT dollar losses. The Hsinchu-based chipmakers account for 80 percent of the world's graphics chips and 15 percent of its memory chips.