The Cabinet would dissolve a multibillion-dollar contract to build minesweeper ships with financially troubled Ching Fu Shipbuilding Co (慶富造船) if necessary, Premier William Lai (賴清德) told lawmakers yesterday.
Ching Fu, one of the nation’s largest private shipbuilders, won a NT$35.85 billion (US$1.19 billion at the current exchange rate) contract with the Ministry of National Defense in October 2014 to build six minesweepers as part of the nation’s indigenous shipbuilding and upgrade program, but it is suspected of using the money to invest in projects in China and of defrauding banks.
Prosecutors in August questioned company executives about NT$3 billion in loans that are suspected of having been obtained under false pretenses.
Photo courtesy of Ching Fu Shipbuilding Co
Ching Fu secured a NT$20.5 billion loan from a consortium of nine banks headed by First Commercial Bank (第一銀行) after having already received about NT$15 billion.
The money might end up being written off as a bad debt if the shipbuilder declares bankruptcy.
Speaking during a legislative sitting, Lai said that the government would “cut its wrists” — or terminate the contract — if necessary to prevent further losses, but first it would investigate if Ching Fu has the financial and technical abilities to complete the project.
The Cabinet is to form an investigative task force and take steps to ensure that the project’s first minesweeper, which is being built in Italy, would be transferred to the government and not mortgaged by Ching Fu’s debtors, Lai said.
It is to also take disciplinary action against any official found to have been negligent in awarding the contract to Ching Fu, he said.
The ship under construction in Italy is a 700-tonne vessel being built by Intermarine SpA, with the US firm Lockheed Martin providing support for the mine detection hardware and weapons systems.
New Power Party Executive Chairman Huang Kuo-chang (黃國昌) asked Lai how Ching Fu, which signed an investment deal with a Chinese local government before the minesweeper project was announced, could have been able to secure the contract.
“The shipbuilding technology we learn from the Italian manufacturers will end up in the hands of a contractor that has signed an investment agreement with a Chinese local government,” which could compromise national security, Huang said.
Ching Fu bought a sonar system designed for minesweepers from a Chinese company before it won the Ministry of National Defense tender, as if it knew it was going to win the bid, Huang said, asking if anything illegal was involved in the deal.
Ching Fu in 2001 delivered four patrol boats to the Coast Guard Administration, but 338 mechanical problems were found with the boats and the Control Yuan issued a correction to the Cabinet over the procurement process, the lawmaker said.
He asked Lai why the ministry awarded another multibillion New Taiwan dollar contract to an apparently unqualified contractor.
“How could we entrust a contractor that could not properly build a patrol boat with the important indigenous shipbuilding program?” Huang said.
The government allocated a budget of NT$3.47 billion between 2013 and last year for the shipbuilding project, but it overspent by NT$1.36 billion, officials said.
About half of the NT$3.87 billion budget allocated this year has already been paid to Ching Fu, Minister of National Defense Feng Shih-kuan (馮世寬) told lawmakers.
The ministry failed to obtain information about Ching Fu’s purchase of the sonar system before the contract was awarded, Feng said.
He also said he did not know how much of the minesweeper under construction in Italy had been completed.
The paramount chief of a volcanic island in Vanuatu yesterday said that he was “very impressed” by a UN court’s declaration that countries must tackle climate change. Vanuatu spearheaded the legal case at the International Court of Justice in The Hague, Netherlands, which on Wednesday ruled that countries have a duty to protect against the threat of a warming planet. “I’m very impressed,” George Bumseng, the top chief of the Pacific archipelago’s island of Ambrym, told reporters in the capital, Port Vila. “We have been waiting for this decision for a long time because we have been victims of this climate change for
Rainfall is expected to become more widespread and persistent across central and southern Taiwan over the next few days, with the effects of the weather patterns becoming most prominent between last night and tomorrow, the Central Weather Administration (CWA) said yesterday. Independent meteorologist Daniel Wu (吳德榮) said that based on the latest forecast models of the combination of a low-pressure system and southwesterly winds, rainfall and flooding are expected to continue in central and southern Taiwan from today to Sunday. The CWA also warned of flash floods, thunder and lightning, and strong gusts in these areas, as well as landslides and fallen
MASSIVE LOSS: If the next recall votes also fail, it would signal that the administration of President William Lai would continue to face strong resistance within the legislature The results of recall votes yesterday dealt a blow to the Democratic Progressive Party’s (DPP) efforts to overturn the opposition-controlled legislature, as all 24 Chinese Nationalist Party (KMT) lawmakers survived the recall bids. Backed by President William Lai’s (賴清德) DPP, civic groups led the recall drive, seeking to remove 31 out of 39 KMT lawmakers from the 113-seat legislature, in which the KMT and the Taiwan People’s Party (TPP) together hold a majority with 62 seats, while the DPP holds 51 seats. The scale of the recall elections was unprecedented, with another seven KMT lawmakers facing similar votes on Aug. 23. For a
All 24 lawmakers of the main opposition Chinese Nationalists Party (KMT) on Saturday survived historical nationwide recall elections, ensuring that the KMT along with Taiwan People’s Party (TPP) lawmakers will maintain opposition control of the legislature. Recall votes against all 24 KMT lawmakers as well as Hsinchu Mayor Ann Kao (高虹安) and KMT legislative caucus whip Fu Kun-chi (傅崐萁) failed to pass, according to Central Election Commission (CEC) figures. In only six of the 24 recall votes did the ballots cast in favor of the recall even meet the threshold of 25 percent of eligible voters needed for the recall to pass,