Members of the legislature’s Transportation Committee yesterday proposed raising the percentage of revenue from airport service fees allocated to Taoyuan International Airport Corp to help fund its construction costs over the next few years.
The airport service fee is charged when passengers purchase flight tickets. Half of the revenue goes to the Tourism Development Fund, while the other half is used to maintain airport facilities.
Democratic Progressive Party (DPP) Legislator Cheng Yung-peng (鄭運鵬) and independent Legislator Chao Cheng-yu (趙正宇) said that the percentages need to be readjusted due to increased construction costs at Taiwan Taoyuan International Airport.
Photo: Chien Jung-fong, Taipei Times
The Cabinet last year approved the construction of Terminal Three, which is to be built with an estimated budget of NT$74.68 billion (US$2.48 billion), Cheng said, adding that the airport company is only allowed to borrow half of the amount from financial institutions.
The company will also build a third runway and concourse, requiring an additional NT$200 billion, Cheng said.
The firm is to soon run low on cash and credit, Cheng said, adding that its assets — cash and other assets expected to be converted into cash within one year — have declined from NT$7.89 billion last year to NT$5.97 billion this year.
They are to fall further to NT$2.98 billion next year, when the company is to start paying its contractors, he said, adding that its net worth is about NT$33.36 billion.
Based on the principles laid out in the Government Procurement Act (政府採購法), the company could obtain a loan of NT$133.46 billion, he said, adding that there would still be a funding gap even if the company could secure the loan in full.
As the state-run company can only keep 35 percent of its profits, it would therefore take 35 years to cover the construction costs for Terminal Three and 95 years for the third runway and concourse, he said.
“Interest would further elevate construction costs, which would eat away at profits. This would reduce the amount of compensation given to the Taoyuan City Government, which could launch protests,” he said.
Either the government can promise to raise its investment in the airport through a multiyear plan, or it can allocate 60 percent of revenue from the airport service fee for the cost of construction and maintenance of airport facilities, Chao said, adding that the latter move would raise NT$1 billion annually.
Airport service fee revenue should be spent on airport facilities, Chao said, adding that the number of people accessing airports has increased five-fold over the past five years.
The renovations are urgent, as the nation’s image has been damaged because of water leaks, power outages and other problems at the airport, Chao added.
Company chairman Tseng Dar-jen (曾大仁) said that the firm would make huge cash payments for the construction of the facilities.
If the government does not increase its investment in the airport, the company would be paying for the construction costs until 2070, he added.
However, the policy that the company must be financially independent remains unchanged, Tseng said, adding that it is proposing ways to make up for the funding gap.
The percentage of revenue from the fee allocated to the Tourism Development Fund has dropped from 60 to 50 percent, Deputy Minister of Transportation and Communications Frank Fan (范植谷) said, adding that any change would require further deliberation.
“Local governments need the funding for national scenic areas,” Fan said.
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