A Democratic Progressive Party (DPP) Taipei City councilor yesterday accused the Taipei City Government of negligence of duty for failing to collect the monthly rent from the Taipei Y17 Youth Activity Center since it signed an operate-transfer (OT) contract with its current management firm in 2008. The councilor urged the city government to reclaim all the outstanding money — NT$144 million (US$4.92 million) in total — and examine all its current OT projects.
Taipei City’s Department of Education signed a four-year OT contract with the firm in 2008 and the contract required the firm to pay annual royalties to the city government, amounting to 5 percent of its revenue and no less than NT$6.3 million every year.
The activity center has paid NT$26.6 million to the city government over the past four years. However, the city government failed to collect the annual rent of NT$36 million from the activity center, and the accumulated back-rent now totals NT$144 million, according to DPP Taipei City Councilor Lee Ching-feng (李慶鋒).
“The NT$144 million is a huge sum of money, but the city government ignored the contract requirement and failed to collect the rent. We cannot help but wonder whether the city government is generating a profit for the management firm,” he told a press conference.
In response, Wang Yong-jin (王永進), a division chief at the department, said the contract was signed in accordance with the Act for Promotion of Private Participation (促進民間參與公共建設法) and that the act stipulated the public sector can grant private contractors discounts for rent and royalties, depending on the financial condition of the projects.
He said the activity center is an educational facility and the department only collected annual royalties from the management firm as the center itself was not designed to make major profits.
Lee cited the act and said the regulations authorized local governments to grant discounts and attract private participation, but did not allow a total waiver of the rent, criticizing the department for ignoring the regulation details.