Wed, Oct 10, 2007 - Page 2 News List

APBT bid scrutinized for railway conflict of interest

BLURRED LINES KMT Legislator Alex Fai pointed out that two managing directors of the telecom company are officials of Taiwan Railway, the biggest APBT shareholder

By Shelley Shan  /  STAFF REPORTER

Asia-Pacific Broadband Telecom's (APBT, 亞太固網) bid for the Taiwan Railway Administration's (TRA) build-operation-transfer (BOT) project came under scrutiny yesterday over the railway company's seemingly conflicting roles in the deal.

TRA, a state-run firm, has made the construction of the Wanhua (萬華) Train Station Building a BOT project. However, TRA is currently also the largest shareholder in APBT.

Chinese Nationalist Party Legislator Alex Fai (費鴻泰) said that two of the seven managing directors of APBT are TRA officials. They are TRA director-general Frank Fan (范植谷) and deputy director general Hsu Yi-nan (徐亦南). Fai also said three people serving on the APBT's board of trustees are also TRA officials.

"One will wonder if this is still a fair game," he said, "since some of the key TRA officials hold important positions at APBT, who will also serve on the review committee of the BOT project."

Fai also questioned if the bid had strictly followed the Statute for Promoting Private Participation in Public Infrastructure Projects (促進民間參予公共建設法).

Based on requirements in the statute, any private firm bidding for any government-initiated BOT case must not have more than 20 percent of shares owned by the government.

Currently, TRA owns about 12 percent of APBT's shares.

Fai said that APBT is the only telecom operator bidding for the BOT project, and the other three bidders are construction firms.

He suggested TRA avoid a conflict of interest when settling this deal.

APBT had announced earlier that it would hold an investor's conference this month to discuss the possibility of increasing cash flow to NT$30 billion (US$909 million).

TRA has invested NT$8 billion in APBT through a contract signed in 1999 that allowed APBT to use TRA optic fibers for 25 years.

Fai indicated that TRA is planning to increase its investment in APBT after the conference.

TRA issued a statement yesterday saying that it intends to settle the dispute by seeking an interpretation from the Public Constructions Commission.

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