Three Democratic Progressive Party (DPP) Taipei City councilors yesterday accused Taipei Mayor Hau Lung-bin (郝龍斌) of granting favors to the contractor of the MRT Wenhu Line's electromechanical system by allowing it to adjust construction costs based on inflation.
The councilors — Lee Chien-chang (李建昌), Hsu Shu-hua (許淑華) and Huang Hsiang-chun (黃向群) — said Hau had bent the rules set by President Ma Ying-jeou (馬英九) during his tenure as city mayor.
“Mayor Ma signed an official notice stating that the construction costs of the MRT's electromechanical systems could not be adjusted because of inflation,” Lee told a press conference.
“The terms stated in the MRT contract also exclude contractors of the electromechanical system from adjusting their costs based on inflation and asked them to evaluate risks after they secured contracts,” Lee said.
“These documents showed that the contractor asked if it could enjoy the privilege of adjusting its cost based on inflation after winning the bid in 2003,” Lee said.
“Prior to 2006, the Department of Rapid Transit Systems [DORTS] repeatedly rejected the contractor’s requests. But in May 2007, the department proposed that the contractor’s request be accepted, which was subsequently approved by Hau in November 2007. The city then agreed to pay the contractor NT$1.5 billion in additional cost because of inflation,” he said.
Huang also showed a document stating that the city agreed to this settlement because the DORTS said that failure to subsidize the contractor would delay the launch of the Wenhu Line, which was scheduled to begin operations in June.
After the press conference, the three councilors submitted the materials to the Control Yuan for investigation. They also filed lawsuits against Hau for allegedly favoring the contractor.
Taipei City Government spokesperson Rose Chao (趙心屏) rebutted the allegations, saying that the measures were legal.
“The mayor approved the request in accordance with measures laid out by the Public Construction Commission of the Executive Yuan in 2004 stating that construction costs for projects scheduled for completion after Oct. 1, 2003, can be adjusted if inflation exceeded 2.5 percent. This applies to any construction project, even those that have a special clause on inflation in the contract,” she said.
Chao said Hau did not bend the rules set by his predecessor, and that Ma established the rule at a time when there was no national regulation governing costs adjustments.
The change was simply made in accordance with the new measures, she said.
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