Former minister of transportation and communications Yeh Kuang-shih (葉匡時) yesterday said that he believed his resignation was a smart decision as the public can now rationally look at the challenges facing the high speed rail system.
Yeh resigned on Wednesday after the ministry’s plan to save the debt-ridden Taiwan High Speed Rail Corp (THSRC) from imminent bankruptcy failed to secure bipartisan support at the legislature’s Transportation Committee meeting. His resignation was approved by Premier Mao Chi-kuo (毛治國) on Friday.
“Both the government and I have taken a lot of mudslinging from the media in the past one month. I believe that only through my resignation can everybody take what is happening at the high speed rail system more seriously and discuss the relevant issues in a more rational manner,” Yeh said at a meeting with reporters. “I believe I have made a smart decision in resigning to facilitate dialogue on reaching a solution to the financial problems facing the THSRC.”
Photo courtesy of the Taoyuan International Airport Corp
Asked why the financial restructuring plan failed to secure lawmakers’ support, Yeh pointed the finger at Continental Engineering Corp (CEC), one of the THSRC’s five original investors.
“The company [CEC] strongly opposed the financial restructuring plan at a board of directors’ meeting,” he said.
Yeh said he thought he had no problem communicating with CEC chairwoman Nita Ing (殷琪), who is also a former THSRC chairperson, but what happened in the past one month showed that he really does not know her.
Yeh said Ing had told him that she was not optimistic that the financial restructuring plan would be approved by lawmakers, but neither did she propose any alternative plan or suggest any improvements on the plan proposed by the ministry.
Based on the ministry’s plan, THSRC would reduce its capital by NT$39.1 billion (US$1.2 billion) and then later increase the capital by NT$30 billion, while its concession period would be extended from 35 years to 75 years.
Meanwhile, THSRC creditor banks have agreed that the company can use the NT$43.6 billion deposited in an impound account to buy back its preferred shares if the legislature approves the financial restructuring plan.
Yeh said the plan proposed by the ministry was not perfect, but it was the most viable option.
Lawmakers were also divided on whether the plan benefits the original investors or fails to do them justice, he said.
He added that it is impossible for the government to use unreasonable administrative procedures to ask the banks to release the money from the impound account to buy back preferred shares, because these banks have responsibilities toward their shareholders.
Extending the concession period also involves a lot of complicated issues, he said.
The most important thing is the operation of the high speed rail must be dominated by investors from state-run or government-affiliated agencies, which in turn would make the company’s shares available for public purchase, he said.
Only by doing so can the benefits be enjoyed by all people, instead of just the investors or shareholders, he said.
Asked why the ministry did not choose to extend the concession period in two stages, Yeh said that no investor would be interested in the firm if it does not have a sufficiently long concession period to save it from bankruptcy.
The length of the concession period could also affect the potential return on investment, he said.
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