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Lawmaker attacks high-speed rail funding methods

Chinese Nationalist Party (KMT) Legislator Joanna Lei (雷倩), yesterday accused the Executive Yuan of using legal loopholes to counter decisions made by the Legislative Yuan relating to government funding for the Taiwan High-Speed Rail Corp (THSRC).

Lei alleged that in a Ministry of Transportation and Communications expenditure review carried out on June 20, 2002, it was decided that no more government funds, inclusive of those from government-run industries, would be invested in the THSRC.

However, Lei said that since then the Executive Yuan had "time and time again" found ways of getting around the clause.

In December 2002, part 1 of Article 74 of the banking law was amended so that regulations restricting the amount and type of bonds banks can invest in incorporated a clause permitting investment of "fixed income preferred stocks."

Then, at the end of January 2003, NT$26.9 billion (US$804 million) was invested privately in the project through the allocation of "special stocks."

The Executive Yuan last month asked two government-related bodies -- the China Aviation Development Foundation and China Technical Consultant Inc -- to provide funds of NT$4.5 billion and NT$3 billion respectively to help bail out the project.

Lei said that in the most recent attempt to raise funds for the THSRC, the Economic Development and Management Bureau just last week adjusted regulations widening the scope of investment for insurance companies.

"Now they are running out of money, and they have found another way of getting funds," she said.

In response, ministry officials said that government initiatives to help with funding for the THSRC should be regarded positively, and that the completion of the project would add to the nation's economic and political development.

The head of the first division of the Bureau of Taiwan High Speed Rail, Hu Hsiang-ling (胡湘麟), said, "According to the law on the promotion of private participation in infrastructure projects, government investment should not exceed 20 percent. At present there has been an investment of NT$12.5 billion, which is only 17 percent of the total investment of NT$105 billion."

Lei said, however, that restrictions on the government providing more funding for the THSRC introduced in June 2002 took place after the law for private participation in infrastructure projects was passed, and were based on particular considerations at the time.

"Besides, through direct and indirect means, government investment has totaled NT$27.7 billion, far exceeding the 20 percent restriction," she said.
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