July 27, 2015

Taiwan implements high-speed rail reforms

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A new structure for Taiwan High-Speed Rail Corporation (THSRC) came into effect on July 27, when the Ministry of Transport and Communications signed two agreements with the company to terminate the original build-operate-transfer concession for the Taipei - Kaohsiung high-speed line.

Under the new structure, the Taiwanese government will become the majority shareholder in THSRC, but the company will continue to be privately managed. Government-controlled companies will increase their stake from 22.1% to 63.9%, while large private shareholders will cut their holdings from 37.4% to 17.4%. The remaining shares will be held by smaller investors.

THSRC will reduce its capital by 60% or $NT 39bn ($US 1.2bn) to cover its losses before raising its capital by $NT 30bn. $NT 24bn of this will come from the government's High-Speed Rail Construction Fund, with banks providing the remainder.

The operating concession for the line will also be extended from 30 to 70 years.

Upon completion of the reforms, private shareholders will be represented by seats on the board but the government will retain overall control.

THSRC expects to carry 50 million passengers on its 345km line in 2015 and so far this year has achieved punctuality of 99.4% with an average 14.4-second delay per train. Ridership is expected to increase with the opening of new stations in Miaoli, Yunlin and Changwa in December and a 9.2km extension to Nangang in Taipei, which is due to start operating next July.

THSRC is also planning to cut fares, although it has not yet confirmed when this will come into effect.

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