Ahead of a legislative review on a proposed amendment to the Public Debt Act (公共債務法) today, the Taipei City Government made a last-ditch effort to negotiate the debt ceiling issue with the Executive Yuan and warned that the amendment would delay construction on the MRT’s Xinyi and Wanda lines.
Taipei City’s Department of Rapid Transit Systems Commissioner Richard Chen (陳椿亮) said lowering the city’s debt ceiling would affect construction of major MRT lines, because the city government would be forced to rearrange budget plans for public construction projects.
Under the Executive Yuan’s proposed amendment to the act, New Taipei City (新北市) is expected to see an estimated increase of NT$49.8 billion (US$1.7 billion) in its loan capability, Greater Taichung NT$52.9 billion, Greater Tainan NT$45.4 billion and Greater Kaohsiung NT$23 billion.
However, Taipei would see a decrease of NT$183.7 billion, the Ministry of Finance said.
With the debt ceiling for the city lowered to NT$267 billion, it would cover only the city’s general budget and this year’s debt financing for public construction projects.
The department is preparing to suspend public bidding for the first-phase construction of the MRT Wanda-Chungho-Shulin Line should the amendment pass the legislature. The ongoing construction of the MRT Xinyi Line could also be further delayed, Chen said.
He added that the city needed to borrow NT$60 billion from the central government for the construction of the MRT lines. Although the city government will not borrow the total sum in one financial year, the total amount of debt will still surpass the debt ceiling if the amendment is passed.
The proposed amendment has met with protests from special municipalities. Taipei Mayor Hau Lung-bin (郝龍斌) has expressed concern about its impact on Taipei’s finances and warned that a lower debt ceiling could cause delays or suspensions of major infrastructure projects.
Hau said the debt ceiling cut would place a heavy burden on Taipei’s finances and affect the construction schedules of major city projects, including several MRT lines.
Taipei City’s Department of Finance Commissioner Chiu Da-chan (邱大展) said the department has been communicating with the Executive Yuan on the issue. The department has presented several scenarios to the Executive Yuan, hoping to raise the city’s debt ceiling.
Taipei City Government spokesman Chang Chi-chiang (張其強) said the budget plans for the city’s major construction projects, including MRT lines, are five-year schemes at least.
He added that lowering the debt ceiling would inevitably affect public construction projects and urged the Executive Yuan to reconsider its proposed amendment of the act.