Recent mishaps involving build-operate-transfer (BOT) projects have sparked a debate about the growing risks the private sector faces when participating in public infrastructure projects, but it is too early for a verdict.
On Tuesday, Taiwan High Speed Rail Corp (THSRC) chairwoman Nita Ing (殷琪) stepped down from her post, paving the way for much-needed government support for the company, which has more than NT$70 billion (US$2.16 billion) in accumulated losses.
On Wednesday, city councilors in Kaohsiung urged the government to take over the debt-ridden mass rapid transit system there, which is losing NT$250 million a month and is likely to incur nearly NT$6 billion in losses by the end of the year.
On the same day, the Taipei City Government said it might terminate a BOT contract it signed with the Farglory Group in 2006 for the construction of the Taipei Dome after 18 years of planning. The announcement came in response to a Control Yuan warning.
These BOT troubles are just some of the indications in recent years that private firms are feeling the pain of a fragile state of public-private relations. Three years ago, the government threatened to terminate its electronic toll collection contract with Far Eastern Electronic Toll Collection over a dispute concerning service fees.
The BOT model is relatively new in Taiwan compared with other countries and the government did not enact the Act for Promotion of Private Participation in Infrastructure Projects (促進民間參與公共建設法) until 2000.
The advantage of a BOT system is to bring private-sector efficiency to the construction and management of public infrastructure. The recent troubles have raised doubts about the model’s viability, but what has made private investors even uneasier is the government’s handling of BOT projects.
Prior to her resignation, Ing questioned the government’s “consistency and credibility” in its support of the nation’s first BOT project.
In an interview with the Chinese-language Commonwealth Magazine, Ing said working with the government was the biggest risk the rail project faced.
Meanwhile, Farglory chairman Chao Teng-hsing (趙藤雄) said he was so disappointed by the city government that he has sworn off public infrastructure projects.
Their criticism took aim at the betrayal of the spirit of BOT — a healthy public-private partnership. The mutual trust that BOT projects require between the private and public sectors has evaporated. If the government wants the model to be successful, it must stop making the same mistakes.
What we have learned from recent disputes is that the BOT model is not suitable for all public construction projects — especially transportation projects. We have also learned that our concept of the BOT model remains ambiguous, which complicates risk-sharing between the public and private sectors. Moreover, the BOT model needs to be allowed to adapt to the changing business environment.
However, critics who argue that Taiwan should abandon the BOT model should consider the problems of government inefficiency and poor-quality construction.
A series of strong earthquakes in Hualien County not only caused severe damage in Taiwan, but also revealed that China’s power has permeated everywhere. A Taiwanese woman posted on the Internet that she found clips of the earthquake — which were recorded by the security camera in her home — on the Chinese social media platform Xiaohongshu. It is spine-chilling that the problem might be because the security camera was manufactured in China. China has widely collected information, infringed upon public privacy and raised information security threats through various social media platforms, as well as telecommunication and security equipment. Several former TikTok employees revealed
The bird flu outbreak at US dairy farms keeps finding alarming new ways to surprise scientists. Last week, the US Department of Agriculture (USDA) confirmed that H5N1 is spreading not just from birds to herds, but among cows. Meanwhile, media reports say that an unknown number of cows are asymptomatic. Although the risk to humans is still low, it is clear that far more work needs to be done to get a handle on the reach of the virus and how it is being transmitted. That would require the USDA and the Centers for Disease Control and Prevention (CDC) to get
For the incoming Administration of President-elect William Lai (賴清德), successfully deterring a Chinese Communist Party (CCP) attack or invasion of democratic Taiwan over his four-year term would be a clear victory. But it could also be a curse, because during those four years the CCP’s People’s Liberation Army (PLA) will grow far stronger. As such, increased vigilance in Washington and Taipei will be needed to ensure that already multiplying CCP threat trends don’t overwhelm Taiwan, the United States, and their democratic allies. One CCP attempt to overwhelm was announced on April 19, 2024, namely that the PLA had erred in combining major missions
On April 11, Japanese Prime Minister Fumio Kishida delivered a speech at a joint meeting of the US Congress in Washington, in which he said that “China’s current external stance and military actions present an unprecedented and the greatest strategic challenge … to the peace and stability of the international community.” Kishida emphasized Japan’s role as “the US’ closest ally.” “The international order that the US worked for generations to build is facing new challenges,” Kishida said. “I understand it is a heavy burden to carry such hopes on your shoulders,” he said. “Japan is already standing shoulder to shoulder