CSBC Corp, Taiwan (CSBC, 台灣國際造船) yesterday said the company is willing to continue the construction of minesweeper ships if Ching Fu Shipbuilding Co’s (慶富造船) contract with the Ministry of National Defense is terminated.
Ching Fu in 2014 won a contract to build six minesweepers on a budget of up to NT$35.85 billion (US$1.185 billion), but might not be able to fulfill the contract due to financial fraud allegations and technical problems.
In August, prosecutors found that the company had secured a NT$20.5 billion loan from a consortium of nine banks headed by First Commercial Bank (第一銀行) by providing the banks with false contracts.
Premier William Lai (賴清德) on Tuesday said that the government would terminate the contract if necessary to prevent further losses.
The ministry would terminate the contract if Ching Fu halts construction of the first minesweeper — which is being built in Italy — or if it declares bankruptcy, among other scenarios, Navy Command Headquarters Chief of Staff Lee Tsung-hsiao (李宗孝) said on Thursday at the Legislative Yuan.
At a forum on the nation’s indigenous shipbuilding program at the legislature yesterday, ministry officials presented evidence that Ching Fu’s work should have been 7.9 percent complete, but is now 1.26 percent behind schedule because the construction of a factory in Kaohsiung’s Sinda Fishing Port is not yet finished.
The ministry has presented Ching Fu with a deadline to improve its efficiency, a ministry official said.
The ministry is watching the company’s performance closely, but it has not met any necessary conditions for contract termination, Vice Minister of National Defense Pu Tze-chun (蒲澤春) said.
Considering Ching Fu had beaten CSBC to win the tender in 2014, Democratic Progressive Party Legislator Lai Jui-lung (賴瑞隆) inquired about the latter company’s willingness to continue building the minesweepers if Ching Fu were to drop out.
Technically speaking, CSBC is competent to build the minesweepers, but whether it could join the program depends on the ministry’s attitude and how a contract would be negotiated, CSBC vice president Chou Chih-ming (周志明) said.
Meanwhile, the Executive Yuan has established an investigative body convened by Vice Premier Shih Jun-ji (施俊吉) to probe the Ching Fu scandal, Cabinet spokesman Hsu Kuo-yung (徐國勇) said yesterday.
Whether defense ministry officials would face punishment for dereliction of duty would depend on the results of the investigation, Hsu added.
Additional reporting by Lee Hsin-fang
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