Taiwan High Speed Rail Corp’s (THSRC, 台灣高鐵) new financial restructuring plan might secure the support of the legislature if there is a change in the political climate, chairman Victor Liu (劉維琪) said yesterday.
Liu said that the previous financial restructuring plan was unanimously rejected by the Chinese Nationalist Party’s (KMT) legislative caucus in January.
Democratic Progressive Party (DPP) lawmakers also opposed it, saying it would only favor big corporations.
POLITICAL CLIMATE
Liu said he wondered if there has been any change in the political climate since then, even though the company has tried to dismiss doubts that only big corporations would gain from the plan.
“Board directors have made huge sacrifices to reduce the company’s capital by 60 percent in the hopes that the plan would be supported by the public, as well as by legislators,” Liu said.
“Nevertheless, the plan can only be approved by the Legislative Yuan if it is supported by both KMT and DPP lawmakers,” he said.
Politicians have their own considerations, such as an election drawing near, which is a fact the company has to factor in in calculating its chance of securing legislative support, Liu said.
Nevertheless, he said he would seek constructive dialogue with legislators and see if there is still room for improvement in the current financial restructuring plan.
COMPENSATION
If legislators remain unconvinced by the viability of the new financial restructuring plan, THSRC will be forced to seek arbitration demanding government compensation for three different matters, Liu said.
These are: changes in the domestic and international economic situations; amendments to the high-speed rail system design because of the 921 earthquake; and subsidies on tickets for elderly and disabled passengers, he said.
Liu said the firm reduced original investors’ capital by 60 percent to ensure the company’s debts could be erased.
He also said that any acquisition by Chinese investors must be approved by the government, adding that such an plan would require the support of 200,000 small investors to garner ownership. The latter scenario is unlikely to occur, he said.
NEW INVESTORS
Regarding opposition from some of the original investors, Liu said that the new financial restructuring plan was thoroughly discussed and passed by the board of directors.
The company will withdraw its request for arbitration if the legislature approves the plan, he said.
The new plan will only extend the operator’s concession period by 35 years instead of 40 years, but the benefits gained from the extension will be returned to customers through ticket price cuts to the level before the price increase in 2013, he said.
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