The Ministry of Transportation and Communications yesterday confirmed that the Taiwan High Speed Rail Corp (THSRC) is scheduled to present a comprehensive package next month to address its financial problems, including reducing ticket prices.
According to Deputy Minister of Transportation and Communications Chen Chien-yu (陳建宇), ticket prices “would definitely drop,” but when and how the new ticketing scheme is to be implemented would only be finalized after the ministry briefs the lawmakers in November.
THSRC raised prices in August last year, with one-way tickets going up by between 7.1 percent and 9.6 percent.
The ministry has said it wants the prices to return to pre-increase levels.
A one-way ticket from Taipei to Tsoying (左營) in Greater Kaohsiung costs NT$1,630 (US$54). Prior to the price hike the same ticket cost NT$1,490.
The Chinese-language Economic Daily News yesterday reported that the ministry and the THSRC had reached a consensus on a plan to address the financial quagmire facing the firm to help it avoid bankruptcy.
According to the paper, the plan would see the company first reduce its capital by NT$39 billion and later raise NT$30 billion in capital. The company’s operating concession would be extended from 35 years to 75 years, and THSRC will be listed on the stock exchange by 2016.
Asked about the Economic Daily News report, THSRC spokesperson William Hsu (徐宜中) said the company is still communicating with the ministry about some of the details.
What the newspaper reported were just some of the possible options, he said, adding that the details of the package will be discussed at a meeting of the firm’s board of directors next month.
As of last year, the company had total assets of NT$500.6 billion and debts of NT$457.5 billion. Its accumulated operational loss topped NT$52.2 billion.
Minister of Transportation and Communications Yeh Kuang-shih (葉匡時) earlier this year announced several guidelines to address the company’s financial woes, including that the firm’s five original shareholders cannot increase its capital once they agree to reduce it; instead, government-affiliated agencies would increase their investment in the firm and obtain more seats on the board.
THSRC would also need to cut ticket prices so that the public, rather than the company’s shareholders, benefit, the minister said.
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