Kaohsiung prosecutors said yesterday that former premier Frank Hsieh (謝長廷) has now become a target in their investigations of corruption relating to the Kaohsiung Rapid Transit Corp (KRTC) scandal.
"I decided that although the construction of the city's MRT is a build-operate-transfer [BOT] project, it still should be regulated by the Government Procurement Law, which regulates how public bids are conducted," Lo Chien-hsun (
Lo said he had learned that the government funded NT$150.88 billion (US$4.65 billion) of the MRT construction costs, which accounted for 80.3 percent of the total construction fee.
This means the project should be regulated by the procurement law, Lo said.
As the former mayor of Kaohsiung in charge of the project, Hsieh would have been responsible for the decision not to apply the law in relation to the project, and therefore he might have been involved in corruption, Lo said.
The prosecutor said the former director of Kaohsiung's Bureau of Rapid Transit Systems Chou Li-liang (
The scandals related to the KRTC all stemmed from not applying the law, Lo said.
The six public bids for major Kaohsiung MRT construction projects were hosted in 2002.
Officials have said that city council officials were suspected of favoring Hwang Chang Building Co (HCBC) because HCBC won an NT$8 billion contract, the largest of the six projects, despite the fact that RSEA Engineering Co's bid was NT$2.7 billion lower.
They said city officials had rigged the bidding so any company that won two of the six auctions could not take part in the rest. They are also suspected of manipulating the bidding process by holding the auctions for smaller projects first.
When a major contender RSEA Engineering Co won the first two smaller bids, it was forced out of the game for the bigger auctions, prosecutors said.
Lo said the alleged illegal bidding would have been avoided if the city government had applied the law to the bidding process.
Former Government Information Office minister Pasuya Yao (
He said in July 1999 that the city government asked the Cabinet's Public Construction Commission about relevant laws regarding the city's subway, and the commission replied that the procurement law could not apply to the project as it was a BOT project. The city government then decided to conduct the bids using the BOT regulations.
Kaohsiung prosecutors have indicted former deputy secretary-general of the Presidential Office Chen Che-nan (
The investigation is ongoing.