The Executive Yuan favors corporatization, but not privatization, of the Taiwan Railways Administration (TRA), following the model of Chunghwa Post Co, which remains a 100 percent state-owned company under the Ministry of Transportation and Communications, sources said yesterday.
The issue of reforming the TRA has come to the fore again after a fatal train crash on Friday last week in which 50 people were killed and more than 200 were injured.
Premier Su Tseng-chang (蘇貞昌) on Thursday pledged to speed up the TRA’s restructuring.
How to make train rides safer, resolve the agency’s deficit and raise its efficiency are key issues that would determine what operational model it should adopt, sources said.
There are no plans at present to turn the TRA into a company, Minister of Transportation and Communications Lin Chia-lung (林佳龍) said on Thursday, adding that the agency must first undergo an organizational restructuring before the government would consider corporatizing it.
Reforms at the TRA must guarantee employee rights, offer equal access to transportation to all cities and counties, and ensure balanced development of transportation in urban and rural areas, as well as well as maintain reasonable fares, Lin said.
The ministry would propose amendments and submit them to the Executive Yuan for review, he said.
Lin cited as an example Chunghwa Post, which in 2003 underwent an organizational restructuring from its predecessor, the Directorate-General of Posts, and inherited all of the former entity’s affairs, assets and debts.
Unlike before, Chunghwa Post no longer has to turn all of its revenue over to the state. Its annual revenue ranges between NT$280 billion and NT$300 billion (US$9.85 billion and US$10.6 billion), 25 percent of which it can retain as capital reserves.
Administratively, Chunghwa Post only requires approval from the Executive Yuan for personnel appointments above the rank of vice president — unlike its predecessor, which needed government approval for all appointments.
Top Chunghwa Post managers have said that the company’s efficiency has increased after the restructuring, owing to increased autonomy, especially with regard to purchases.
However, a member of Chunghwa Post’s management said that corporatization might not solve the TRA’s problems, as it has been in the red for years and has accrued NT$400 billion in debt.
Even if the TRA is corporatized, it might have to spend all of its earnings to pay back debt and interest, said the official, who requested anonymity.
In terms of administration, corporatizing the TRA would be easy, but its financial problems could prove to be the greatest obstacle to its corporatization, the official said.
If corporatized, the TRA must be able to generate profit and could not passively wait to be bailed by the government’s annual railway fund subsidies, the official said.
Additional reporting by Wang Chun-chi
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