Sat, Sep 19, 2009 - Page 2 News List

Kaohsiung to help MRT operator

LOSSES An official said the city government would give Kaohsiung Rapid Transit Corp NT$2.8 billion to help it fill part of the deficit incurred during construction

STAFF WRITER, WITH CNA

The Kaohsiung City Government will help resolve the financial deficit currently borne by the Kaohsiung Rapid Transit Corp (KRTC), which operates the Kaohsiung Mass Rapid Transit (MRT) system, the city's MRT bureau director Chen Kai-ling (陳凱凌) said on Thursday.

Given a low passenger volume, the system posted an operating loss of NT$2.2 billion (US$67.8 million) last year and is expected to post another loss of NT$2.6 billion this year, KRTC general manager Yen Pang-chieh (顏邦傑) said.

With these figures, plus NT$1 billion in losses related to building problems during its construction phase, the system is projected to post nearly NT$6 billion in cumulative losses by the end of this year, more than half of the KTRC's total paid-in capital of NT$10 billion, Yen said.

Describing the company as being in dire financial straits, Yen said that it is also due to pay billions of New Taiwan dollars in construction fees to contractors during the current cost accounting period.

Saying that ticket revenues are not enough to offset operating losses, Yen said the company was seeking financial support from the city government.

In response, Chen said that the city government would provide NT$2.8 billion to help the company fill the deficit incurred during the construction stage.

Chen promised that the local government would do what it could to address the KRTC's financial crisis, while calling on the company to map out potential solutions, including ways to increase passenger volume and raise more capital.

Yen said the company did not do well in raising revenue and reducing expenditures until last year when it began implementing a retrenchment plan to cut operating losses.

He said the company had also tried to increase revenue by launching land development projects and renting out shopping space near MRT stations, but the results did not meet expectations because of the economic downturn.

The company has set a target of achieving average daily passenger volume of 360,000 this year and 500,000 next year. But to date, daily passenger volume has reached no more than 100,000, or about 25 percent of its forecast, Yen said.

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