Minister of Transportation and Communications (MOTC) Yeh Kuang-shih (葉匡時) yesterday laid out the government’s goals in resolving the Taiwan High Speed Rail Corp’s (THSRC) financial problems when he appeared before a meeting of the legislature’s Transportation Committee.
Yeh was scheduled to brief the committee members just on the ministry’s operation, but he said he wanted to discuss the THSRC’s woes as well because time was running out to find a solution.
“This is not the best time to address the financial problems, but it is the last window of opportunity. The Taiwan High Speed Rail Corp will definitely go bankrupt if the problems are not addressed by the end of the year. The only other solution would be a government takeover. If the company files for bankruptcy and the government is forced to take over operation of the system, the banks will probably collect on their loans, but neither large nor small investors will get anything back,” he said.
While THSRC’s major shareholders support the general idea of first reducing the firm’s capital and then raising it to reduce losses, they differ over the details of how to achieve this, he said.
The ministry also has yet to decide if the THSRC should be allowed to extend its concession period from 35 years to 75 years, he said.
Yeh said the government’s five principles in working out a solution to the crisis are: all decisions must be made in the public’s best interests; a majority of seats on THSRC’s board of directors should be assumed by representatives of government agencies or government-affiliated organizations to ensure the sustainability of the rail system; the government must protect the interests of about 60,000 small shareholders who invested in the system because of the government’s endorsement; THSRC should become a publicly listed firm after its financial restructuring is completed; and the system’s operations should be supervised by the legislature.
Ticket prices will certainly be reduced if a comprehensive solution involving the concession period and financial restructuring is found, the minister said.
Lawmakers peppered Yeh with questions about the restructuring plan after his presentation.
Chinese Nationalist Party (KMT) Legislator Lin Kuo-cheng (林國正) said that THSRC’s revenue rose by NT$1.6 billion (US$52.92 million) in the first half of the year, after it raised ticket prices, compared with the same period last year. If that growth rate continued, the company would earn NT$3.2 billion more this year than it did last year, he said.
THSRC has assets of NT$500.6 billion, but it has debts of NT$457.5 billion and accumulated operational losses of NT$52.1 billion, which basically means it is broke, Lin said.
“The company should not be tying ticket prices to its own financial problems, otherwise, it is trying to hold the public hostage using its own financial issues. I will boycott the financial restructuring proposal if the company refuses to lower ticket prices,” he said, adding that he thought prices should be reduced by 20 percent.
Democratic Progressive Party (DPP) Legislator Lee Kun-tse (李昆澤) threatened to boycott any extension of THSRC’s concession period, saying that the system’s railway switches had malfunctioned 67 times since operations began.
The ministry only sees the needs of the corporation, not the needs of the public, Lee said.
DPP Legislator Yeh Yi-jin (葉宜津) questioned the ministry’s ability to either negotiate a deal or keep a secret, saying that details of the proposed restructuring plan were disclosed to the media during the ministry-THSRC negotiations.
It would take about NT$30 billion for the government to buy the high-speed rail system, instead of the more than NT$300 billion the Bureau of High Speed Rail has claimed, she said.
“The ministry has no right to sacrifice the future generation of this country,” she said.
921 EARTHQUAKE: The magnitude 7.3 quake left 2,456 people dead and 10,718 injured, while 53,661 houses were fully destroyed and 53,024 houses damaged The Central Weather Bureau yesterday received about 50,000 views on Facebook after it posted the data that it collected on Sept. 21, 1999, when the nation was devastated by a magnitude 7.3 earthquake. The data showed that the 921 Earthquake hit the nation at 1:47am, with the epicenter being 7km southwest of the bureau’s quake detection center in Nantou County’s Yuchi Township (魚池) at a depth of 8km. The quake left 2,456 people dead and 10,718 injured, while 53,661 houses were fully destroyed and 53,024 houses damaged, with the cost of the damage estimated at NT$300 billion (US$10.8 billion at the current
British newspaper The Mail on Sunday reported that Prince Charles met with Bruno Wang (汪家興), a Taiwanese fugitive who describes himself as a Chinese philanthropist and donated ￡500,000 (US$683,522) to the prince’s charity, the Prince’s Foundation. The newspaper reported that Wang is wanted in Taiwan on charges related to money laundering and being a fugitive from justice, allegations he denies, and drew comparisons between Wang and the Russian banker Dmitry Leus. Investigation and cooperation with foreign authorities have found that Bruno Wang’s father, Andrew Wang (汪傳浦), had stashed proceeds from a scandal involving the procurement of Lafayette frigates in 61 bank accounts,
AT ODDS: The KMT called on the government to seek bilateral dialogue with Beijing to resolve the issue that led to the ban on custard apple and wax apple imports Democratic Progressive Party (DPP) officials and lawmakers yesterday condemned China’s sudden ban on imports of custard apples and wax apples from Taiwan as “obvious political retaliation,” while the opposition called for a scientific investigation into Beijing’s claim to have found pests in imports of the fruits. China earlier yesterday announced a ban on the importation of the two fruits from today, citing repeated discoveries of Planococcus minor, a type of mealybug. The announcement follows a similar ban on Taiwanese pineapples imposed in February. At least Beijing gave a few days’ notice when it banned pineapple imports, an unnamed government official said yesterday. This time
BY OTHER MEANS: China could see CPTPP membership as a means of circumventing trade restrictions imposed by the US, amid an ongoing trade dispute between them The US could invoke a clause in its trade agreement with Canada and Mexico to block China’s application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a government official said yesterday. Under Article 32.10 of the Exceptions and General Provisions of the United States-Mexico-Canada Agreement (USMCA), if either Canada or Mexico enter a free-trade agreement with a nonmarket economy — such as China — the US could withdraw from the agreement. “If that clause applies to multilateral free-trade agreements such as the CPTPP — which Mexico and Canada are members of — that might be cause for the two