A plan to salvage debt-ridden Taiwan High Speed Rail Corp (THSRC) suffered a setback during a meeting of the legislature’s Transportation Committee yesterday morning when Democratic Progressive Party (DPP) lawmakers demanded that the Ministry of Transportation and Communications hold a public hearing on the proposal before reviewing it.
As of June, THSRC had assets of NT$501 billion (US$16.4 billion) and liabilities of NT$452.8 billion. It had accumulated losses of NT$47 billion. It is also obligated to pay dividends of NT$48.2 billion to shareholders.
The Bureau of High Speed Rail, which oversees THSRC’s operations, said that based on its estimates, the company could go bankrupt in March unless it obtains NT$53.3 billion to buy back the preferred shares issued during the construction of the rail system.
Photo: Wang Min-wei, Taipei Times
Resolving this issue is crucial because the company is facing 39 lawsuits demanding that it redeem the preferred shares and pay dividends, the bureau said. Four lawsuits have seen the court side with the plaintiffs, it added.
THSRC’s board of directors last month approved a restructuring plan hammered out during negotiations between the ministry, the bureau and the company that would see the firm buy back NT$39.2 billion in preferred stock, reduce its capital by NT$39.1 billion and then later increase the capital by NT$30 billion, while its concession period would be extended from 35 years to 75 years.
As Transportation Committee members scrutinized the financial blueprint yesterday, DPP lawmakers asked the ministry to provide more information on the financial figures and explain them at a public hearing.
DPP Legislator Lee Kun-tse (李昆澤) said that extending the company’s concession period to 75 years would save it NT$7.1 billion in annual amortization costs, while the government could increase its investment in the company by raising NT$13 billion from government-affiliated institutions and THSRC shareholders could see a return of up to 5.9 percent.
The ministry has said that high-speed rail ticket prices could drop if the restructuring plan was implemented, but the prices proposed in the plan are higher than those set before prices were hiked last year, Lee said.
“This shows that the government only cares about being nice to THSRC and is stingy when it comes to consumers,” Lee said.
DPP Legislator Kuan Bi-ling (管碧玲) said that the government needs to explain how it arrived at the figures in the plan because she does not see why the concession period should be extended.
The government has also not made enough effort to communicate with the owners of the preferred shares, which are mainly government-affiliated institutions.
“I have handled many disputes in civil lawsuits,” Kuan said. “Even if the final verdict is handed down, there could still be room for an out-of-court settlement. These institutions are all affiliated with the government. What is the government’s role in this matter?”
Minister of Transportation and Communications Yeh Kuang-shih (葉匡時) told lawmakers that the ministry has tried to dissuade THSRC’s five original investors from investing more money in the company, even though the Company Act (公司法) does not ban them from doing so.
The ministry would like to raise the needed funding from the government-affiliated institutions that had purchased the preferred shares, which would allow government shareholders to dominate THSRC’s board.
“By allowing the government to gain control of the company, we can erase the doubts that only certain private shareholders will benefit from the deal,” he said.
None of the government-affiliated institutions have an incentive to invest if the concession period is not extended, he said.
Asked what the ministry would do if the original investors continue investing in THSRC if the legislature approves the restructuring plan, Yeh said that he would resign.
THSRC could still go bankrupt if ticket prices are set too low, Yeh said, and the public would end up paying the consequences.
However, there is still room for discussion, he said.
The ministry did consider the option of a government takeover, but it estimated that the government would need about NT$390 billion just to purchase the high-speed rail system, a figure that did not include facility maintenance or equipment replacement costs, Yeh said.
THSRC chairman Tony Fan (范志強) said the company has spent NT$28 billion building four new stations and buying new trains.
“We are supposed to start paying back these costs next year,” Fan said. “We will be cash-strapped if we do not raise funds in time.”
Hong Kong singer Eason Chan’s (陳奕迅) concerts in Kaohsiung this weekend have been postponed after he was diagnosed with Covid-19 this morning, the organizer said today. Chan’s “FEAR and DREAMS” concert which was scheduled to be held in the coming three days at the Kaohsiung Arena would be rescheduled to May 29, 30 and 31, while the three shows scheduled over the next weekend, from May 23 to 25, would be held as usual, Universal Music said in a statement. Ticket holders can apply for a full refund or attend the postponed concerts with the same seating, the organizer said. Refund arrangements would
Former president Tsai Ing-wen (蔡英文) on Monday called for greater cooperation between Taiwan, Lithuania and the EU to counter threats to information security, including attacks on undersea cables and other critical infrastructure. In a speech at Vilnius University in the Lithuanian capital, Tsai highlighted recent incidents in which vital undersea cables — essential for cross-border data transmission — were severed in the Taiwan Strait and the Baltic Sea over the past year. Taiwanese authorities suspect Chinese sabotage in the incidents near Taiwan’s waters, while EU leaders have said Russia is the likely culprit behind similar breaches in the Baltic. “Taiwan and our European
Taiwanese indie band Sunset Rollercoaster and South Korean outfit Hyukoh collectively received the most nominations at this year’s Golden Melody Awards, earning a total of seven nods from the jury on Wednesday. The bands collaborated on their 2024 album AAA, which received nominations for best band, best album producer, best album design and best vocal album recording. “Young Man,” a single from the album, earned nominations for song of the year and best music video, while another track, “Antenna,” also received a best music video nomination. Late Hong Kong-American singer Khalil Fong (方大同) was named the jury award winner for his 2024 album
The US Department of State on Monday reaffirmed that US policy on Taiwan remains unchanged, following US President Donald Trump’s use of the term “unification” while commenting on recent trade talks with China. Speaking at a wide-ranging press conference, Trump described what he viewed as progress in trade negotiations with China held in Geneva, Switzerland, over the weekend. “They’ve agreed to open China — fully open China, and I think it’s going to be fantastic for China. I think it’s going to be fantastic for us,” Trump said. “I think it’s going to be great for unification and peace.” Trump’s use of the
RSS