Shortly before midnight on Friday, the Taiwan High Speed Rail Corp (THSRC,
Despite such good news, the row over the rail company's latest injection of funds from two government-funded organizations -- the China Technical Consultants Incorporated Foundation (
Critics argued that the government's financial intervention goes against a legislative resolution passed earlier to limit the government's stake in the rail company via state-owned enterprises to 12 percent, down from an original 20 percent ceiling. THSRC claims that after the injection of fresh funds, government and state-owned enterprises will still only have an 11.89 percent stake in the company, while its major shareholders will jointly hold a 28.52 percent. But it is well known that government investments are often made indirectly and hidden under the category of "private investments."
Critics are also concerned that the government's decision to pump more capital into the rail project conflicts with the spirit of the "build, operate and transfer" (BOT) model. In this model, the government is not supposed to interfere with the project, but rather let private investors build and operate the system for a certain period of time before transferring ownership to the government.
The critics have a point. The government's financial boost to the nation's first BOT project has raised doubts about the viability of that business model in Taiwan. Nevertheless, the project is now almost 90 percent complete, and no one wants to see it collapse. The government therefore has little choice but to aid the high-speed rail project in its hour of need. In fact, if the rail project is disrupted because of fund-raising difficulties, the government would have to make a compulsory buyout, which would cost an estimated NT$300 billion -- not to mention the job losses, legal disputes and economic fallout that would result.
And so, the government's decision should be viewed rationally. The Cabinet has decided to form a special task force of experts in transportation, financing and operational management to evaluate the rail project. Hopefully this special team will act to supervise the multi-billion dollar project. THSRC's major private shareholders -- whose affiliated companies make big profits by contracting construction work -- have been hesitant to inject more money into the project. The task force should also thoroughly review major shareholders' responsibilities and consider whether the board of directors should be adjusted after the high-speed railway begins service next October.
It is important to note that the THSRC's contracts with the government were finalized by the Chinese Nationalist Party (KMT) before the DPP took power. It is therefore unreasonable to blame the DPP for all the project's difficulties. For its part, the government should avoid pointing fingers, and work to review the its previous agreement with the THSRC and establish a new division of rights and responsibilities between the government and the private sector.
There were high hopes in the past about the high-speed rail project, and expectations that it would be completed in the fundamental spirit of the BOT model. The project's current crisis shows that the BOT experiment has failed. The government, private sector and the public should learn from this fiasco and avoid making the same mistakes with other BOT projects in the future.
When US budget carrier Southwest Airlines last week announced a new partnership with China Airlines, Southwest’s social media were filled with comments from travelers excited by the new opportunity to visit China. Of course, China Airlines is not based in China, but in Taiwan, and the new partnership connects Taiwan Taoyuan International Airport with 30 cities across the US. At a time when China is increasing efforts on all fronts to falsely label Taiwan as “China” in all arenas, Taiwan does itself no favors by having its flagship carrier named China Airlines. The Ministry of Foreign Affairs is eager to jump at
The muting of the line “I’m from Taiwan” (我台灣來欸), sung in Hoklo (commonly known as Taiwanese), during a performance at the closing ceremony of the World Masters Games in New Taipei City on May 31 has sparked a public outcry. The lyric from the well-known song All Eyes on Me (世界都看見) — originally written and performed by Taiwanese hip-hop group Nine One One (玖壹壹) — was muted twice, while the subtitles on the screen showed an alternate line, “we come here together” (阮作伙來欸), which was not sung. The song, performed at the ceremony by a cheerleading group, was the theme
Secretary of State Marco Rubio raised eyebrows recently when he declared the era of American unipolarity over. He described America’s unrivaled dominance of the international system as an anomaly that was created by the collapse of the Soviet Union at the end of the Cold War. Now, he observed, the United States was returning to a more multipolar world where there are great powers in different parts of the planet. He pointed to China and Russia, as well as “rogue states like Iran and North Korea” as examples of countries the United States must contend with. This all begs the question:
In China, competition is fierce, and in many cases suppliers do not get paid on time. Rather than improving, the situation appears to be deteriorating. BYD Co, the world’s largest electric vehicle manufacturer by production volume, has gained notoriety for its harsh treatment of suppliers, raising concerns about the long-term sustainability. The case also highlights the decline of China’s business environment, and the growing risk of a cascading wave of corporate failures. BYD generally does not follow China’s Negotiable Instruments Law when settling payments with suppliers. Instead the company has created its own proprietary supply chain finance system called the “D-chain,” through which
RSS