Tue, Sep 29, 2009 - Page 8 News List

THE LIBERTY TIMES EDITORIAL: THSRC’s failure is a warning sign

After Taiwan High Speed Rail Corp (THSRC) chairwoman Nita Ing (殷琪) resigned and was succeeded by Ou Chin-der (歐晉德), the government intervened with the management of the debt-ridden company. The personnel reshuffle signified the failure of the build-operate-transfer (BOT) project, which was launched 12 years ago.

Although the government has not yet taken over management of THSRC, the company has in practice become a state-run enterprise. Under these circumstances, the pan-blue camp has its sights on settling a few political scores. Prosecutors and the Control Yuan are also prepared to investigate any irregularities, in an attempt to launch yet another political purge.

But in response to questions about why THSRC has sunk to its current low, Ing bluntly said in a recent interview that traditional industries have been undermined over the last 12 years and this has cost Taiwan nearly 2 million jobs and sabotaged the domestic aviation industry as well as the high-speed rail.

This is not only a fundamental problem for THSRC, it is a warning that applies to other aspects of Taiwan’s economic development.

Although the high-speed rail is Taiwan’s largest BOT project, construction was delayed repeatedly and on several occasions the project struggled with financial difficulties.

With many shareholders unwilling to increase their investment in the project, government departments had to put up capital. The resulting situation was absurd: The government’s stake in a BOT project exceeded that of private investors.

The company’s financial problems did not improve after the high-speed rail began operating. Instead, its finances continued to deteriorate. As revenue has fallen short of expenditure, debt continued to mount and has now hit NT$400 billion (US$12.3 billion).

Ing, who was from the private sector, has now stepped down and the government is taking the dominant role.

To be blunt, Ing’s political affiliation was never blue. When the Democratic Progressive Party was in power, pan-blue politicians and media outlets criticized THSRC in an attempt to create the impression that the BOT project was corrupt in nature.

Ing’s resignation and the government’s new controlling role is tantamount to declaring the THSRC project a failure. This pleases the pan-blue camp to no end, and it is now attacking THSRC through the Control Yuan and judiciary. They will not be satisfied until Ing is in jail.

No concrete evidence of irregularities has been brought forward in what remains a mess of confused accusations in a political battle. Let the results of the judicial investigation speak for itself.

The public should not blindly follow politicians and media outlets with an agenda.

The most important task at hand is to analyze the repercussions of Taiwan’s economic reliance on China.

By so doing, we will not only understand the root causes of THSRC’s problems, but also uncover problems associated with weak domestic demand and skyrocketing unemployment.

The comments Ing made to the media have answered all these questions. THSRC failed as a result of the government’s longstanding pro-China policy and years of encouraging businesses to move to China.

Ing admitted that the main reason for the failure was a miscalculation of the number of passengers. The government initially estimated that 230,000 people would travel on the high-speed rail each day, but daily passenger numbers are only about 80,000, one-third of projected targets.

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