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Lawmakers across party lines shoot down HSR restructuring plan

Lawmakers across party lines shoot down HSR restructuring plan

Taipei, Jan. 7 (CNA) Lawmakers from across party lines on Wednesday resoundingly rejected a financial restructuring plan drafted by the Ministry of Transportation and Communications aimed at bringing the languishing operator of the Taiwan High Speed Rail out of the red. Citing concerns over who would benefit from the restructuring process, lawmakers slammed the door on the ministry proposal that called for measures including a capital reduction and then increase as well as extending the concession period granted to the Taiwan High Speed Rail Corp. (THSRC) to exclusively operate the rail service by an extra 40 years. Before offering his resignation over his ministry's failure later in the day, Transportation Minister Yeh Kuang-shih defended the plan as the least costly option to steer Taiwan's only high speed rail service back on track. The Transportation Ministry has argued a full government takeover of THSRC would harm the interests of the public, the government, shareholders, and the 3,500 High Speed Rail employees. Its plan called for NT$150 billion for new locomotives and cars, and NT$200-NT$300 billion to maintain facilities over the next 50 years. The 40-year extension would have saved up to NT$7.1 billion in yearly expenditures, of which NT$4 billion was intended as returns for shareholders with the remainder distributed to the public through fare discounts. A 5.9 percent investment return figure was designed to attract new investors, and was not a guarantee, according to the ministry. Lawmakers were unimpressed.
Ruling Kuomintang (KMT) lawmaker Lin Kuo-cheng said that the ministry plan does not reflect THSRC's dire financial condition, and this lack of urgency will do little to affect change. Lin criticized the plan to give investment returns of 5.9 percent to THSRC's original shareholders along with any future shareholders, deeming the terms preposterous in light of the average 1-3 percent return performance by state-endorsed Chunghwa Post and Bank of Taiwan and across Taiwan's private insurance sector. He blasted what he called an attempt to offload costs on the public, as the company has proposed reducing prices by only 6.13, less than the highly unpopular 9.48 percent price hike it enacted last year. KMT lawmaker Wang Chin-shih suggested the government scuttle the plan and begin the process anew. Yeh Yi-jin (no relation to the minister) of the Democratic Progressive Party (DPP) questioned the call for an additional NT$550 billion (US$17.2 billion), more even than the NT$480 billion spent to build the high speed rail system in the first place. She rejected what she said was effectively letting the government allocate NT$500-NT$800 billion in potential operating profits over five decades while THSRC maintained exclusive operations rights for 40 years. Kuan Bi-ling, also from the DPP, alleged that the financial restructuring plan was devised by the Transport Ministry behind closed doors in collusion with big business, as the five original major shareholders would still retain a 22 percent stake. As the government is holding less than a 20 percent stake on a number of state-run banks to participate in THSRC's capital increase, it is plausible that the government may be intending to benefit specific conglomerates. Lawmaker Fai Hrong-tai, who is also the acting director of the KMT's Central Policy Committee, meanwhile said that as the THSR was established during the administration of former President Chen Shui-bian of the DPP, the political fallout from its collapse must be shouldered by both the opposition and ruling parties. (By Chen Wei-ting, Wen Kuei-hsiang and Ted Chen)


Updated : 2021-09-25 08:17 GMT+08:00