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.
GOOD DIPLOMACY: The KMT has maintained close contact with representative offices in Taiwan and had extended an invitation to Russia as well, the KMT said The Chinese Nationalist Party (KMT) would “appropriately handle” the fallout from an invitation it had extended to Russia’s representative to Taipei to attend its international banquet last month, KMT Chairman Eric Chu (朱立倫) said yesterday. US and EU representatives in Taiwan boycotted the event, and only later agreed to attend after the KMT rescinded its invitation to the Russian representative. The KMT has maintained long-term close contact with all representative offices and embassies in Taiwan, and had extended the invitation as a practice of good diplomacy, Chu said. “Some EU countries have expressed their opinions of Russia, and the KMT respects that,” he
An increase in Taiwanese boats using China-made automatic identification systems (AIS) could confuse coast guards patrolling waters off Taiwan’s southwest coast and become a loophole in the national security system, sources familiar with the matter said yesterday. Taiwan ADIZ, a Facebook page created by enthusiasts who monitor Chinese military activities in airspace and waters off Taiwan’s southwest coast, on Saturday identified what seemed to be a Chinese cargo container ship near Penghu County. The Coast Guard Administration went to the location after receiving the tip and found that it was a Taiwanese yacht, which had a Chinese AIS installed. Similar instances had also
CHANGES: After-school tutoring periods, extracurricular activities during vacations or after-school study periods must not be used to teach new material, the ministry said The Ministry of Education yesterday announced new rules that would ban giving tests to most elementary and junior-high school students during morning study and afternoon rest periods. The amendments to regulations governing public education at elementary schools and junior high schools are to be implemented on Aug. 1. The revised rules stipulate that schools are forbidden to use after-school tutoring periods, extracurricular activities during summer or winter vacation or after-school study periods to teach new course material. In addition, schools would be prohibited from giving tests or exams to students in grades one to eight during morning study and afternoon break periods, the
AMENDMENT: Contact with certain individuals in China, Hong Kong and Macau must be reported, and failure to comply could result in a prison sentence, the proposal stated The Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP) yesterday voted against a proposed bill by Democratic Progressive Party (DPP) lawmakers that would require elected officials to seek approval before visiting China. DPP Legislator Puma Shen’s (沈伯洋) proposed amendments to the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例), stipulate that contact with certain individuals in China, Hong Kong and Macau should be reported, while failure to comply would be punishable by prison sentences of up to three years, alongside a fine of NT$10 million (US$309,041). Fifty-six voted with the TPP in opposition