Democratic Progressive Party (DPP) Legislator Tuan Yi-kang (段宜康) yesterday accused the Ministry of Economic Affairs (MOEA) and the Ministry of Transportation and Communications (MOTC) of inaction over the possible bankruptcy of a state-owned firm.
Taiwan Rolling Stock Co (TRSC) is in danger of declaring bankruptcy if it fails to deliver on a NT$15.4 billion (US$515.7 million) contract to build 256 EMU800 commuter railway carriages for Taiwan Railway Administration (TRA), also a state-owned company, said Tuan, who called the second press conference in as many days about the case.
TRSC and TRA have been engaged in a contract dispute since TRA accused TRSC of breach of contract because it hired a Japanese braking system subcontractor that was ranked second on the priority list behind a German company, the lawmaker said, adding that the dispute is under arbitration.
The government controls 63.64 percent of TRSC shares and the MOEA cam appoint TRSC chairman and general manager.
“It is ridiculous that Minister of Economic Affairs Shih Yen-hsiang (施顏祥) and the MOTC, which supervises the TRA, both sat on the sidelines and did nothing to resolve the dispute, which could jeopardize Taiwan’s transportation services if the train carriages are not delivered on time,” Tuan said.
Ho Hsien-lin (何獻霖), director of TRA’s Rolling Stock Department, told the press conference that the TRA insisted that the carriage should be built as the contract requires.
Tuan on Tuesday disclosed a leaked video clip showing TRSC general manager Huang Hung-tu (黃鴻都) telling a company meeting that the company was in danger of bankruptcy and that Shih had made clear he “could not care less” about the crisis.
In the five-minute video clip that Tuan obtained from unidentified sources, Huang was shown addressing a TRSC meeting on July 20, saying that the company could close with a loss of between NT$1 billion and NT$6 billion and Shih said he would not handle the crisis “even if TRSC declared bankruptcy because I have too many more important things to take care of.”
“It’s unbelievable that the minister of economic affairs, who could appoint TRSC’s chairman and general manager, would turn a blind eye to the faltering state-controlled enterprise and ignore its operation efficiency,” Tuan said on Tuesday.
Even more unthinkable how why TRSC could be on the verge of bankruptcy when the company was able to secure contracts to build 256 EMU800 commuter railway carriages for the TRA, 156 carriages for the Taipei MRT and 64 for the Taiwan Taoyuan International Airport MRT Line, Tuan said.
The State-owned Enterprise Commission’s deputy director, Chang Wen-hsiung (張文雄), said on Tuesday that TRSC’ operations appeared to be normal, with a net profit of NT$83 million last year and NT$16 million as of the end of July.