Taipei Mayor Ko Wen-je (柯文哲) yesterday said a standard operation procedure (SOP) governing joint development projects has been put into place to safeguard the Taipei City Government’s interests.
Ko’s comment came one day after the Control Yuan filed corrective measures against the city over breaches made by former mayor Hau Lung-bin’s (郝龍斌) administration of the contract with Kwon On Construction Engineering covering joint development buildings integrated with the mass rapid transit (MRT) Muzha station.
Kwan On is affiliated with Radium Life Tech Co, which built the MeHAS City joint development housing complex under a contract signed with the city when President Ma Ying-jeou (馬英九) was Taipei mayor.
The MeHAS project has been embroiled in controversy for a while.
“With all that mess from the past, we had to spend several months writing an SOP on joint development projects, one that is transparent and legal, to allow public servants to boldly perform their duties and to prevent large corporations from raking in all the benefits,” Ko said.
“I am in the inconvenient position of having to comment on past administrations. All I can say is: Follow the due legal procedures [while assigning possible punishments]. I am more concerned about whether we will be able to run the new system in a lawful and reasonable manner,” the mayor said.
According to the Control Yuan’s corrective action report, the Taipei City Government failed in 2007 to act in compliance with the contract with Kwon On and suffered losses of about NT$36.69 million (US$1.12 million at current exchange rates) as a result.
Alleged violations committed by the city include failing to deduct the cost of a parking lot it built under the contract when calculating Kwon On’s investment in the project, resulting in an overestimation of the company’s stake, the Control Yuan report stated.
As the buildings were erected on land owned by the city government, the miscalculation caused the government to forgo its rights to earn about NT$21.15 million in profit, the report said.
It also led to the city paying Kwon On NT$3.99 million more than necessary for the construction costs, as well as costing the city about NT$11.55 million in asset appreciation, the report said.
“The Taipei City Government learned of the losses in December 2013, but delayed filing a civil lawsuit until January this year. Furthermore, it did not demand compensation for the losses it suffered from asset appreciation, NT$11.55 million, or for interest arising from delayed payments,” the report said.
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