The government should come up with a more effective supervisory mechanism for build-operate-transfer (BOT) projects, in order to regain the public's confidence in the model, experts said yesterday.
Their comments came after the recent public uproar over the implementation of the BOT system in Taiwan, following the Kaohsiung rapid transit system scandal and the money-sucking high-speed rail project. Both projects were designed under the BOT model.
Their remarks were also noteworthy in light of comments earlier this week from Minister of Transportation and Communications Lin Lin-san (
Given the bumpy experience of BOT projects, Lin suggested on Monday at the legislature's Transportation and Communications Committee that future BOT projects be nixed. But his remarks were overruled on Wednesday by his boss, Premier Frank Hsieh (
Lin's disappointment was understandable, the experts said. BOT projects are supposed to improve cost efficiency for the government, but the government has paid enormous sums to take over the high speed rail project to ease private contractor's funding difficulties, and the Kaohsiung rapid transit project has reportedly had ballooning construction costs due to circumvention of the Government Procurement Law (
Kuo Yao-chi (
When the government invited private sector firms to bid for the high-speed rail in 1997 and the KRTS project in early 1999, both the government and private sector were subject to the regulations set by this Statute. The Government Procurement Law was passed in late 1999.
Aiming to set clearer guidelines for risk allocation on public-private projects, the government passed the Statute for Promoting Private Participation in Public Construction (
"The effort is still not enough," said Ho Shih-ping (
Tsai Tui (
To emerge from what he called a "lame BOT system," Ho suggested that the Ministry of Finance should also be the administrator of the projects, and be involved in both budgeting and inspecting implementation.
James Ku (
To ensure that contracting companies abide by the contract and plan, Ku suggested that the government should work with an independent board director or supervisor in the companies.
Responding to the criticism, Huang Hsi-hsun (
"Taiwan is still in the early stage of adopting the BOT model, but I believe the effects will be seen in the near future," Huang said.
Citing statistics from the UK, Huang said about 80 percent of traditional projects run over budget or miss completion deadlines, compared to only 20 percent of BOT projects.
Moreover, according to one government estimate, Taiwan's GDP will increase by more than 2 percent for every year that the government draws NT$100 billion (US$3 billion) of private investment in BOT projects.
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