Taiwan High Speed Rail Corp (THSRC), the operator of the nation's first bullet train, has delayed the opening of the service to October next year, citing severe delays in the construction schedule.
"The [corporation's] board of directors decided to reschedule the [opening] of the high-speed railway to Oct. 31 next year following a meeting this morning," THSRC chairwoman Nita Ing (
THSRC's major shareholders include Continental Engineering Corp, Teco Electric and Machinery Co, Fubon Financial Holding Co and the Evergreen Group.
The announcement comes after months of speculation that the THSRC would miss its deadline to launch the NT$460.7 billion (US$13.8 billion) train service after reports that the project was falling behind schedule in constructing its core mechanical and electrical systems.
The company had planned to launch the train this Oct. 31.
Ing yesterday attributed the delay to slow progress in construction, testing of various systems and evaluation of overall operations.
"It's a pity to have to make this decision," Ing said. "We are confident we can abide by the new schedule," she said.
The delay will result in increased costs of NT$19.3 billion, lifting the total cost to NT$480 billion, THSRC president George Liu (劉國治) said.
The added cost mostly consisted of extra interest payments, he said.
But the figure did not include the estimated loss of NT$50 billion in revenue based on the THSRC's projections of NT$130 million per day in the first stage of operation.
Liu said the construction of the core mechanical and electrical systems had lagged behind schedule. According to company statistics, at the end of July THSRC had completed 87.89 percent of the 345km track, 92 percent of station construction, but only 60.44 percent of the mechanical and electrical systems.
When asked whether THSRC would seek compensation for the delay from the Japanese consortium Taiwan Shinkansen Corp (TSC), contractor for the core systems' construction, Ing shunned the question.
She would only say that TSC is a partner of THSRC and that the priority now was to complete the construction of railway on time.
According to a contract signed by the two parties in December 2000, in the event of falling behind schedule, TSC would have to pay THSRC NT$200 million per day in compensation and to cover interest losses until construction was completed.
It has been reported that the core mechanical and electrical systems may be completed only by September next year.
The consortium of seven Japanese companies include Mitsui Corp, Mitsubishi Heavy Industries, Mitsubishi Corp, Marubeni Corp, Sumitomo Corp, Kawasaki Heavy Industries and Toshiba Electric.
The 345km bullet-train service will link Taipei with Kaohsiung and is expected to carry up to 1 million passengers a year.
THSRC shares, which trade on a gray market ahead of a stock-exchange listing, fell 0.67 percent to NT$7.45 yesterday.