Mon, Nov 15, 1999 page19

• MRT boom still a dream for business

  GRAVY TRAIN Taipei's new Mass Rapid Transit system is a boon for commuters and tourists -- but the economic benefits and costs are harder to calculate

  • By Tu Po-heng / STAFF REPORTER
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  Getting around Taipei's streets ranges from less than easy to death-defying. Traffic jams, cramped buses, crazy scooters and mad taxi drivers have made it a real hassle. Yet after the launch of the Hsintien line of Taipei's Mass Rapid Transit (MRT) system last week, traveling around the city might not be as annoying as it was.

  The new line will reduce the time needed to commute between Hsintien and the Taipei Train Station from 40 minuets to 19 minutes and shorten the time between Hsintien and Tamshui from more than one hour to just 53 minutes. Apart from these visible benefits, the completion of the Hsintien line also creates some invisible ben-efits, such as increased productivity resulting from faster commuting, less spending on pollution and traffic control, and increased consumer spending.

  If these invisible benefits were converted into dollar value, the Hsintien line is expected to create NT$1.98 billion worth of economic benefits, excluding ticket revenue, according to the Taipei Rapid Transit Corp (TRTC, 台北?j23捷1B股份|3--?膝q).

  

  Through a cooperative venture with President Enterprises Corp, eye-catching `Koala Bear cars' are beautifying the MRT's Mucha line in Taipei.

  BY GEORGE TSORNG, TAIPEI TIMES

  Tourism

  The tourism industry will be one of the primary beneficiaries of the launch of the Hsintien line.

  Taking the Taipei Zoo (台北市立動物園), which sits at the end of Mucha line, as example -- the number of its visitors jumped significantly following the completion of the Mucha line on March 1996.

  The number of zoo visitors in August 1996 climbed to nearly 350,000, an increase of 118,000 from August 1995. Since then, the numbers have continued to stay around the 300,000 level. Even in the winter, the number of zoo visitors increased an average of 20,000 people compared to the years before the launch of the Mucha line.

  "The Mucha line indeed helps our efforts to lure visitors," said an official at the Taipei Zoo.

  "There is an increasing number of visitors taking the MRT to the zoo, especially students and young parents. That inspired us to come up with the idea of painting koalas on the outside of the train."

  Not only tourist sites but also shops around recreation spots received a boost to their sales.

  A store manager of the Ding Gua Gua Fried Chicken (3誑吤?/CHINESE>), near the entrance of the Hsin Peitou (新北投) station said its monthly sales increased by 20 to 30 percent after the MRT service to that station was launched. Peitou is a famous hot springs resort area on the outskirts of the Taipei.

  "The most significant change is that before Peitou was a quiet place after dark, but now it has become a busy tourist place from day to night," said the manager.

  The influx of tourists has also led to more and more fast food stores and restaurants opening up in Peitou.

  "It's getting harder and harder to do business here. Although more visitors bring in more money, they also bring in more shops and competitors," said the manager.

  A manager at a McDonald's in Hsin Peitou said the store's sales doubled after the launch of the MRT, but soon, the increased sales was shared by a new McDonald's that opened nearby.

  The MRT has changed not only the business environment, but also the way people enjoy their leisure time. A manager at the Spring Resort Hotel (春?扆s店), a famous spa and restaurant in Peitou, said that more and more stylish customers prefer taking MRT to driving their own cars to the hotel.

  "The MRT has caused changes in consumer behavior," said the manager. "It has changed the perception that only middle-and-low income families will take the MRT, as more and more high-class families now prefer the MRT."

  This situation is expected to repeat itself in the Hsintien area as well. Su Tseng-chang (蘇-s昌), Taipei County Commissioner said at the inauguration ceremony of the new line that the Hsintien line is expected to bring 30,000 tourists on the weekends to the famous sightseeing spot of Pitan (碧潭) in the Hsintien area.

  However, not everyone is welcoming the hordes of tourists. Residents in the Tamshui Township recently spoke out strongly against the government's ideal of setting up a pedestrian walking zone to boost local tourism.

  "Residents here don't welcome over-developed tourism because tourists come here and leave trash and traffic jams," said an official at the Tamshui Township Government.

  Real estate

  The real estate market is also expected to receive a boost from the opening of the Hsintien line, but some real estate analysts said the upsurge might not be seen in the near future due to weak sentiment in the market.

  "If the entire real estate market continues its downturn, it's unlikely to see a significant price escalation in the near future despite the opening of the MRT," said an analyst at the Rebar Rehouse and Real Estate Co, Ltd (?O霸?ETH>屋). He noted that the land price index of the Hsintien area as of March 1999 was posted at 88.32 points, down 11.68 points from the same period in 1998, indicating a decline in the land price.

  The index, released by the Land Administration Department under the Ministry of Interior is an indicator of price fluctuations. Yet the analyst said, drawing on the experience of the Tamshui area, the inauguration of the Hsintien MRT will help land prices escalate eventually. He noted that the land index for the Tamshui area in March 1998 was posted at 100.42 points, up from 96.82 points in March 1997 when the Tamshui line started operation.

  "While the entire Taiwan area posted an average 1.62 point year-on-year decline in the index, the index for the Tamshui still grew 0.43 points from a year earlier, showing that the area has a great escalation potential," he said.

  In particular, the price of commercial lands in Tamshui saw a robust growth. According to the Land Administration Department, the average commercial land price in the area increased from NT$76,452 per square meter in March 1997 to NT$78,064 in March 1998, and rose further to NT$83,018.

  Meanwhile, the price of residential lands in Tamshui jumped from NT$47,769 per square meter in March 1997 to NT$50,617 per square meter in March 1999.

  "On the evidence of these figures, it's certain that the MRT will boost the land price. However, the upward trend of the Hsintien area will become clear only after the real estate market picks up," said the analyst.

  Shops

  To the surprise of many who thought that the MRT would bode well for nearby stores, a survey conducted by the 21st Century Real Estate Co (?G?Q?@世紀 動2?/CHINESE>) early this year showed that the opposite was true. The survey showed that the majority of shops around the MRT reported a less than 2.5 percent investment return rate. Along the Mucha, Tamshui, and Chungho lines, only shops around the Chungho line's Ching-An station reported an average return rate of between 8.5 percent to 10 percent, while shops around the rest 38 stations reported an average return rate of below 2.5 percent.

  Many store owners said that the MRT brought in people but not customers. Only the first shop on the entrance of each station and nearby shops featuring big window displays appear to have benefited from the MRT.

  Chiu Chin-yi (|黃R宜), an analyst at the 21st Century, said the phenomenon can be attributed to expensive land prices as a result of "high expectations of the MRT."

  For example, the land for stores in the Chunghsiao Fuhsing station cost around NT$1.50 to NT$2.5 million per ping (a ping equals 3.31 square meters) with monthly rental prices range from NT$8,000 to NT$25,000 per ping. Consequently, the average return rate is squeezed to the range of 0.32 percent to 1.67 percent.

  Bus

  Bus operators have been the hardest hit by the MRT era. A manager at the Hsintien Bus Co (新店客1B) says the company suffered heavy losses following the opening of the Tamshui line and has decided to cancel two bus lines running between Hsintien to Tamshui.

  "Before the launch of the Tamshui line, our daily revenue is nearly NT$200,000. But, now, it has shrunk to only NT$100,000," she said, adding that the profitability of the company's buses decreased after the MRT opened, dropping from NT$7,000 a day in the past to NT$5,000 a day now.

  In light of its painful exper-ience, the company decided to shorten routs running from Hsintien to Taipei on the first day of the Hsintien line's operation. "This time, we decided to become MRT transit buses and not to compete head-to-head against the MRT," she said.

  Many of the MRT's peppiest cheerleaders have admitted that the system has proven to be the world's most expensive public transportation system per kilometer -- as the 48km line is expected by the Taipei City Government to have racked up costs of NT$440 billion following completion of the Nankang line in December.

  However, a TRTC official says, "it's worth it because the benefits brought by the MRT will be greater than that."
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