TAIPEI (Taiwan News) — Taiwan Railway Corp. is forecast to experience a NT$12 billion (US$367 million) loss this year following its corporatization, a figure higher than last year’s losses.
TRC was formerly state-owned. It was restructured into a company on Jan. 1 to tackle its debt crisis and gain more operational flexibility, according to GVM.
The initial loss estimate for this year was about NT$7.4 billion, but the actual loss is expected to surpass last year’s NT$11.4 billion. Core business losses are forecast to reach NT$13 billion, an increase of NT$379 million from the previous year, per CNA.
TRC Chair Du Wei (杜微) acknowledged that the company's initial years, particularly the first, would present significant challenges. He noted increasing expenditures and a widening gap between income and spending.
Du explained that these included an increase in the employee welfare fund from NT$1.2 billion to NT$2.3 billion, NT$200 million in asset transfer fees, and a NT$600 million increase in vehicle depreciation costs. Rental income from some TRC land, such as the Taipei Depot, has been redirected to the Railway Bureau’s debt repayment fund, further reducing income.
Ticket prices, frozen for nearly 30 years, have not yet been adjusted. Du also noted that the replacement of TRA’s aging fleet is a significant sunk cost, with considerable depreciation.
While cash flow is expected to turn positive by 2026, accounting profits will likely be realized only after large-scale development projects, including the Taipei Twin Towers and Nangang Marshalling Yard joint projects, are completed, with increased rental income anticipated in 2027.
Despite core business losses, TRC’s side operations, including bento sales, leasing, and asset development, are projected to generate a surplus of NT$3.39 billion this year. Bento sales are expected to reach 9.2 million units, and the higher bento prices will push revenue beyond the NT$748 million from 2019, potentially setting a new record.
Former Transport Minister Wang Kuo-tsai (王國材) noted that after the corporatization of Korean railways in 2005, accidents were reduced by 90%. He also highlighted that the flexibility in land development and significant financial improvements following the change.
