The high-speed rail is expected to make its first repayment to the government this month after it began to turn a profit last year, the Bureau of High Speed Rail confirmed yesterday.
Based on the contract between the bureau and Taiwan High Speed Rail Corp (THSRC), the latter owns exclusive rights to operate the high-speed rail system for 35 years. The contractor is obligated to pay the government 10 percent of its earnings, before taxes, every year.
The payment for the first five years of operation will be at least NT$2 billion (US$66.8 million). The cumulative payoff for the following five years will be about NT$10 billion. When the contract expires, the total sum paid to the government will be approximately NT$108.1 billion.
THSRC began operations in 2007, reporting losses of NT$29.4 billion in the first year. The losses dropped slightly in the second year to NT$25 billion
The company posted losses of NT$4.8 billion in the third year, because of an increase in passenger volume as well as a government decision to assist THSRC by lowering the interest rate.
Losses in 2010 dropped further, to NT$1.2 billion and last year, the company reported a net profit of NT$5.78 billion.
Even though THSRC still has cumulative losses of approximately NT$60 billion, the company said it would still make this month’s payment.
The bureau said that the repayment would be used to pay back the loans that were used to construct the access roads to the high speed rail stations.