The legislature’s Transportation Committee asked the Ministry of Transportation and Communications (MOTC) yesterday to be ready to take over the debt-laden Taiwan High Speed Rail Corp (THSRC) because the company may not be able to sustain operations.
Chinese Nationalist Party (KMT) Legislator Liao Cheng-chin (廖正井) said THSRC has an accumulated operational loss of NT$67.5 billion (US$1.93 billion), about half of its capital. It also owes about NT$344.5 billion on bank loans.
“Under the Securities and Exchange Act (證券交易法), the stock of such a company would have been de-listed,” Liao said.
He said he feared THSRC “might not make it” this time.
The high-speed rail service’s occupancy rate was just 43 percent, making it difficult for the company to increase revenues, while its request that its creditor banks lower the loans’ interest rate makes it unlikely the firm could secure additional bank funding, Liao said.
He suggested the ministry ask THSRC to increase its capital reserves.
He also suggested that board of directors’ positions representing the government’s shares — about one-third of the stock — be turned into unpaid positions.
THSRC has reduced its daily schedule and cut the salaries of senior management in a bid to reduce operational costs, but this has created new problems, KMT Legislator Lee Hung-chun (李鴻鈞) said.
Contractually THSRC is supposed to have at least 61 one-way trains per day, he said, and the fact that it now has just 106 two-way trains a day Monday to Thursday was an obvious violation of its contract.
Even with the management’s voluntarily salary cuts, some managers could still make an annual salary of more than NT$10 million (US$289,000), or 10 times more than that of the director of the Bureau of High Speed Rail.
Democratic Progressive Party (DPP) Legislator Yeh Yi-ching (葉宜津) cited a report scheduled to be published the latest edition of Next Magazine today, saying that THSRC had hired an unlicensed train driver.
“Given its financial losses, the ministry might consider training drivers themselves, which could prepare you to take over the operation of the high speed rail,” Yeh told Minister of Transportation and Communications Mao Chi-Kuo (毛治國).
Mao was scheduled to brief the committee yesterday about the budget for the next fiscal year, including the ministry’s budget and the special construction budget to boost domestic demand.
Meanwhile, the committee passed a resolution asking the Civil Aeronautics Administration, the Taiwan Railway Administration and the Taiwan Area National Freeway Bureau to monitor restaurant prices in airport terminals, railway stations and freeway service areas.
Contractors must be required to set reasonable prices for those products and the price list should be reviewed by the committee as well, the lawmakers said.
Yeh, who proposed the resolution, said it was cheaper to buy food at Taipei 101 than at an airport.
A bowl of pork ball soup cost NT$40 at Taipei 101, but NT$100 at airport terminals, while chicken rolls cost NT$60 at Taipei 101 and NT$150 at airports, Yeh said.