Sat, Aug 12, 2006 - Page 1 News List

Far Eastern to give government ETC company stock

By Jackie Lin and Jimmy Chuang  /  STAFF REPORTERS

Far Eastern Group, the major shareholder in Far Eastern Electronic Toll Collection Co, yesterday abruptly announced that it would give all of its stockholding in the ETC firm to the government and completely withdraw from toll collection operations.

The Far Eastern Group currently holds a 55 percent stake in the joint venture worth NT$1.4 billion (US$43 million) through Far EasTone Telecommunications Co. The remaining 45 percent stake is controlled by Teco Electric & Machinery Co, Systex Corp and Mitac Inc.

"The [Far Eastern] Group will donate its stake to the government unconditionally," Lang Ya-ling (郎亞玲), spokeswoman for Far Eastern Electronic, told the Taipei Times in a telephone interview.

The group said it would not seek compensation from the government and that its employees and technological know-how would also be transferred to the government.

If the Ministry of Transportation and Communications decides to accept the offer, this would make the government the biggest shareholder in the build-operate-transfer (BOT) project.

In response, the Cabinet said that the Far Eastern Group's latest move would not change anything, while the government would reconsider its partners for the ETC system, Cabinet Spokesman Cheng Wen-tsang (鄭文燦) told reporters yesterday.

Cheng's remark referred to the ruling by the Supreme Administrative Court last week that the ministry must reconsider its partner for the toll system.

Far Eastern, Taiwan Yu-Tung Information Technology Co and Acer Group were the three original competitors in the ETC bid. Far Eastern used infrared technology for its system, while both Yu-Tung and Acer relied on microwave technology. Acer has already made it clear that it is no longer interested in the bid.

"We will re-evaluate the infrared and microwave systems and make a new decision at a later date," Cheng said. "We will treat both Far Eastern and Yu-Tung as equals."

To avoid repeating the same mistake, the review process will be made public and the Cabinet will make sure that the Statute for Promoting Private Participation in Public Infrastructure Projects (促進民間參與公共建設法) is strictly followed.

"Premier Su Tseng-chang (蘇貞昌) has promised more than once that there will not be any favoritism during the process. The decision will be based solely on the evaluations," Cheng said.

However, whether the firm would be qualified for the soon-to-be-held second selection process has been called into question as the government's stockholding in BOT projects must not exceed 20 percent, according to the statute.

Lang said it would be up to the government how to resolve the matter.

She said the company had confidence in the infrared system it developed for the electronic toll collection project but political factors and waves of criticism have tarnished its image.

Vice Minister of Transportation and Communications Tsai Duei (蔡堆) last night said that the new selection process may have to be modified if the government decides to accept the stake, according to a CNA report.

Tsai didn't elaborate on what changes would be needed or whether the government would cancel the new selection process, now that only one option was available, the report said.

Amy Chen (陳逸潔), public relations manager for Teco, said they did not know about Far Eastern Group's decision to withdraw until yesterday and Teco needed time to understand the situation before making any decisions.

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