When Ko Wen-je (柯文哲) was running for Taipei mayor in 2014, his campaign focused on the so-called “five major corruptions,” among which was the Taipei Dome project. After taking office, he set up an anti-corruption committee to investigate the previous Taipei City Government.
However, urban development is so complex that not even Ko — who often brags about his IQ of 157 — could find a solution. He keeps boasting about his abilities, but this political farce has dragged on for about seven-and-a-half years.
Ko recently resorted to trying to fool the public by announcing a profit-sharing deal with developer Farglory Land Development on the Taipei Dome project.
Under his stewardship, the Taipei Dome build-operate-transfer (BOT) project has transformed from a “triple win” to a “triple loss” for businesses, the public and the city government.
Ko has little understanding of the spirit of BOT schemes. The Taipei Dome is being financed, built and operated solely by a private company in accordance with the Act for Promotion of Private Participation in Infrastructure Projects (促進民間參與公共建設法).
When the operation period expires, ownership of the facility is to be transferred to the Taipei City Government. By doing so, the government should be able to reduce expenditures and use the private company’s efficient operations to create job opportunities and tax revenue, while the company can enjoy exclusive operation rights.
Therefore, “royalty-free” BOT projects are common, and some governments even subsidize some of the costs. Ko’s criticism of the model highlights his ignorance.
There is no way to compare the situation then with now, as the housing market has changed. The nation’s real-estate market was stagnating when contract negotiations for the Taipei Dome began in 2004.
At that time, the price of a 30 ping (99.2m2) apartment near Taipei’s Dunhua Road was only NT$8 million (US$268,998 at the current exchange rate), but the price had doubled to more than NT$15 million by the time Ko ran for mayor in 2014.
Although he won the election by preaching populist hostility toward the rich, more tangible and intangible costs for the Taipei Dome have been wasted due to his disrespect for professionalism.
Ko is only trying to find a way out from the political deadlock surrounding the project. As he fooled the public by announcing a profit-sharing deal with Farglory, the 0.6 percent of profit in the deal was actually the lowest limit.
The Taipei Dome has even caused a chilling effect on other development projects, such as the 50-year above-ground land rights on the original site of the Taipei City Council building, with a development premium of NT$6 billion. The bidding for the project was halted twice during former Taipei mayor Hao Lung-bin’s (郝龍斌) terms in office.
Although Ko halved the royalty to NT$3.228 billion in 2015, no bidder was willing to accept the project. The next year, bidding was aborted a fourth time.
In 2017, a company finally won the project with a royalty of NT$2.9 billion. However, since the housing market is much more vibrant than the housing market during Hau’s terms, Ko’s decision of cutting the royalty by half would certainly be scrutinized.
Perhaps due to his hostility toward big conglomerates, most enterprises have been hesitant about investing in Taipei, while neighboring New Taipei City and Taoyuan have formed a “magnet effect,” drawing in corporations.
Wang Juei-hsing is a former chief of the Taiwan Provincial Government’s Land Development Division.
Translated by Eddy Chang
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