An amendment to the Statute for Encouragement of Private Participation in Transportation Infrastructure Projects (獎勵民間參與交通建設條例) has been proposed to authorize the government to take over the nation’s high-speed rail system if it has financial problems and ensure that it can continue without interruption, the Bureau of High Speed Rail said, adding that it is very different from the government seizing private property.
The fate of the Taiwan High Speed Rail Corp (THSRC) hangs in the balance, as it has an accumulated loss of NT$52.2 billion (US$1.71billion), which amounts to nearly 50 percent of the company’s capital.
Aside from a loan that it has to pay annually to banks, the company has also planned to buy back preferred stocks worth NT$50 billion.
Last month, Minister of Transportation and Communications Yeh Kuang-shih (葉匡時) spoke of measures to save the debt-ridden company from going bankrupt, including reducing capital and later increasing it, and extending the concession period.
In case the financial improvement plan fails to be approved by the Legislative Yuan, the Ministry of Transportation and Communications proposed the amendment to the statute as the legal basis for the government to take over the high-speed rail system.
However, the proposed amendment has faced opposition from some of the THSRC’s original investors, who accuse the government of forcefully seizing private property.
Lawmakers in the legislature’s Transportation Committee also refused to review the amendment on the grounds that some questions remain unanswered.
The Bureau of High Speed Rail said that the government has to exercise its authority to take over operation of the high-speed rail if it is not able to operate due to financial problems, which in turn would affect the public’s access to transportation.
The measure did not mean that the government would seize private property, the bureau said.
The bureau said that Article 43 of the statute already authorizes the ministry to stipulate separate rules of enforcement for a government takeover, adding that the amendment this time was to make some of these enforcement rules part of the statute itself, with reference to other government regulations.
The purpose was to avoid controversy as a result of any government takeover in the future, the bureau said.
The bureau added that the same article in the statute has already listed the conditions under which the ministry can activate the procedures for a government takeover, including the mismanagement of the high-speed rail operator, failure to improve operations within a designated period of time, or other major infractions of contracts.
“If the operator is able to address the contract violations, the government should terminate its takeover and allow the operator to run the system again,” the bureau said.
“Even if the government and the operator terminate the contract, the government needs to follow the terms of the contract in buying back the system,” it added.
However, the bureau said that amending the statute was one part of several complementary solutions to the problems facing the high-speed rail.
“We hope that the company can quickly present its plan to address its financial issues, which remains the top priority now,” the bureau said.
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