The fate of Taiwan High Speed Rail Corp (THSRC) continued to hang in the balance as the legislature’s Transportation Committee yesterday decided to hold another meeting, on Wednesday next week, to review the financial restructuring plan of the company.
The committee’s ruling marked another major setback to the Ministry of Transportation and Communications (MOTC), as it was hoping to have the plan approved during the last week of the legislative session to rescue the company from an imminent bankruptcy.
MOTC Minister Yeh Kuang-shih (葉匡時) made a last-ditch effort by giving a power-point presentation on the severity of the financial issues facing the high-speed rail operator, which lasted almost an hour.
However, lawmakers from the Democratic Progressive Party (DPP) said that some of the facts in Yeh’s presentation were new to them and demanded time to review the materials.
DPP Legislator Yeh Yi-jin (葉宜津) said the minister spent a month preparing for the presentation, but legislators were given only 30 minutes to digest the materials and 12 minutes to question the ministry before they decided on a case involving billions of dollars.
DPP Legislator Kuan Bi-ling (管碧玲) said that she found it hard to believe that the ministry would have to spend NT$150 million (US$4.72 million) assessing the value of the company’s assets, which she said would be unacceptable based on the standards used by Taipei Mayor Ko Wen-je (柯文哲).
Although THSRC chairman Tony Fan (范志強) responded that a series of legal procedures remain to be completed after the plan is approved at the committee, including submitting the plan to the plenary session and holding special shareholders’ meeting and regular shareholders’ meeting as per the requirements of the Company Act (公司法).
Another review session would cause further delays executing these procedures, he said.
Despite Fan’s objections, following negotiations among DPP and the Chinese Nationalist Party lawmakers, the committee ruled it would review the financial restructuring plan again on Wednesday next week.
According to the Bureau of High Speed Rail, the government agency supervising the operation of the high speed rail system, Wednesday would be the last window of opportunity to prevent the THSRC from filing for bankruptcy.
The government would have to undertake procedures to take over the system if the committee fails to come to a definite decision on the plan, the bureau said.
Yang Cheng-chun (楊正君), director of the bureau’s first division, said the bureau’s original plan was to sign a revised contract with the THSRC on Jan. 14 if the plan were approved yesterday, which involved reducing the capital first increasing the capital later and extension of the concession period.
“We were hoping that the revised contract could take effect by the end of March, so the accounting firm auditing the THSRC’s financial accounts would not produce a report in April saying that the company is unable to operate,” Yang said.
Yang added that the company can only raise the fund after the contract takes effect, when the company is officially permitted to extend its concession period.
“Without the incentives of a longer concession period, no investors would come to invest in the system,” he said.
Yang said that the bureau was hoping that the company would hold a special shareholders’ meeting on March 3 and a regular shareholders’ meeting before June 30.
However, the committee’s decision to hold another review meeting next week leaves hardly any “wiggle room,” he said.
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