Land-lease regulations spawn corruption

Regulations originally intended to facilitate land acquisition for private schools have spawned large-scale corruption and turned the education sector into a front for land-grabbing, the Chinese-language media said yesterday.

State-owned Taiwan Sugar Corp (Taisugar, 台糖), which has leased land to dozens of schools at low prices over the past four years, has become a sideshow in the snowballing Jin-Wen Institute of Technology (景文技術學院) scandal.

A set of guidelines promulgated in May 1997 allowed state-owned enterprises to lease their land cheaply to groups engaging in "important construction" projects in the private sector. Schools and colleges were included in that category.

The Ministry of Economic Affairs abolished the guidelines last month.

The regulations turned schools and colleges into a lucrative business and a front for politicians and companies attempting to take possession of cheap land.

As a result, an increasing number of politicians, including legislators and local government officials, have elbowed their way into the education business, the report said. Legislators and government officials have a stake in many of the 24 schools and colleges that have sealed land-lease deals with Taisugar, the report said.

While the cheap land leases helped the schools cut costs and opened the door for officials to receive kickbacks from potential renters, they brought little benefit to Taisugar itself, the report said.

The rush for cheap land in the education sector has also benefited officials in the education ministry and local governments, as a large number of schools apply for various permits, the report said.

Taisugar has leased its land to schools at an average monthly rate of NT$10,000 to NT$60,000 per hectare. Taisugar officials have also admitted that the company's rates are much cheaper than land lease rates in adjacent areas, it said.

The report said Taisugar had agreed to lease 1,000 hectares of land to 80 schools when the Ministry of Economic Affairs abolished the guidelines last month, effectively stopping state-owned enterprises from leasing their land to private parties.

The well-intentioned regulations have created complications in the education sector as various political factions have tried to get a share of the pie.

When he was chairman of Taisugar, Chang Yu-hui (張有惠) agreed to the policy of leasing land to schools. But after becoming a minister without portfolio in the DPP government, Chang called for the abolishment of the land lease regulations.