Thu, Sep 02, 1999 page17

• Stakes are raised for high-speed rail

  TRANSPORTATION Eurotrain is offering to take10 percent of the equity of the Taiwan High Speed Rail Corp to boost its chances of being involved in the project

  • By Tu Po-heng / STAFF REPORTER
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  Eurotrain, Europe's bullet-train builder said yesterday it is willing to take a stake up to 10 percent in the Taiwan High Speed Rail Corp (THSRC) (台灣高鐵) in the hopes of increasing its chances of becoming the supplier of the company's rolling stock.

  "We believe it is the right moment to confirm our participation in the equity of this project. We have made this proposal to THSRC and will render it in discussion with them in the near future," said Ambroise Cariou, head of Eurotrain in Taipei.

  Although Cariou declined to reveal the exact dollar amount this 10 percent stake investment was worth, it is thought to be valued at around NT$12 billion given that the THSRC is capitalized at around NT$120 billion.

  Nor did he want to go into detail about Eurotrain's long-rumored financial incentives or answer questions about any potential involvement in the operation of the company because of its proposed investment.

  Eurotrain was chosen by the THSRC as the preferred subcontractor last year when the THSRC was bidding for the contract to build the US$13 billion high-speed railway which will run 345 km between Taipei in the north and the southern port city of Kaohsiung.

  THSRC announced earlier in the year that it would further open the bid to Japan's Shinkansen team. As this purchase deal involves an NT$70 billion to NT$80 billion business opportunity, Eurotrain is competing fiercely against the Shinkansen team.

  According to THSRC, a final decision on a builder will be made by the end of September.

  Cariou also said that the European Union's (EU) Trade Commission has sent an official letter to the Taiwan government expressing the interest of "all Europe" in this project.

  The move immediately triggered speculation among local press that political influence in the project is escalating. However, Phai Hua-way (許偉勳), Eurotrain's media coordinator, said, "We just wanted to assure you that we have the full support of not only the French and German governments, but the support of the entire EU."

  Although some analysts have said that Shinkansen and Eurotrain both have an even chance of being chosen by THSRC, Shinkansen is believed to have advantages in its financial dealings while Eurotrain has advantages in its systems-based deals.

  Carious doesn't agree with this analysis, insisting that their "commercial deals are also very competitive."

  Cariou said Eurotrain has promised to take up to a 10 percent stake in the project to help clear financial logjams that have stalled the plan, but the Japanese team has yet to make any concrete offers in this respect.

  Moreover, he said Eurotrain is willing to offer a 100 percent technology transfer to Taiwan. "For a similar project in Korea, we transferred to Korean industry our full technology in such a way that the last trains will be 100 percent manufactured in Korea. Here in Taiwan, for this project, we will cooperate with Taiwan's industry in the areas of telecommunications, power supply, and maintenance."

  He also attacked the Shinkansen system for its noise. "Under the same conditions, in a speed of 300 km/hr and no noise barriers, the noise level of Eurotrain is 92 dB but the Shinkansen would be 98 dB. That is, Shinkansen is 6 dB noisier than Eurotrains," Cariou said.

  However, Chang Chi-chou (張濟周), a Shinkansen team member in Taiwan, hit back at Cariou's statement, saying that "the assessment on the Shinkansen trains was done years ago and they are now out-dated."

  Chang also declined to comment on statements that Eurotrain officials made at the press conference. "We don't want to trigger a war of words here now."

  Eurotrain is led by Germany's Siemens AG, maker of Europe's Inter City Express, and GEC Alsthom, maker of France's TGV bullet train. GEC Alsthom links Britain's GEC Plc and France's Alcatel Alsthom.

  Shinkansen is operated by Japan Railways and built to JR specifications by subcontractors.

  The THSRC initially planned to put the train into operation in 2003, but that date is now seen as over-optimistic.
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