Taiwan Today

Kaohsiung City Council speaker Chuang Chi-wang warned Sept. 23 that the municipal government ought to make preparations to take over the southern port city’s financially troubled mass rapid transit system. Chuang raised the alarm bells hot on the heels of the central government’s move to assume a more dominant role in the management and operations of the Taiwan High Speed Rail Corp. that has accumulated more than NT$400 billion (US$12.36 billion) in debt. The speaker noted that Kaohsiung’s MRT system is losing an average of some NT$250 million a month and that its accumulated losses are expected to reach NT$6 billion by the end of this year. The figure would amount to more than half of the Kaohsiung Rapid Transit Corp.’s total capital and exceed the maximum limit for taking out new bank loans, he pointed out. According to Chuang, the main reason for the MRT system’s financial troubles is low passenger volumes and its inability to increase ridership. With an average of only about 120,000 passengers per day using the MRT’s orange and red lines, ridership has fallen short of that needed to cover the system’s basic operating costs, he said, adding that the city government must therefore prepare to assume control of its operations. At the same time, he suggested that investigative units launch new probes to determine whether there were any irregularities in the contract bidding process and construction of the system. According to the Kaohsiung City Mass Rapid Transit Bureau, the shareholders of the BOT (build-operate-transfer) project have the main responsibility for the system’s operations. State-run firms and organizations, including China Steel Corp., the Executive Yuan’s National Development Fund, RSEA Engingeering Corp., the Industrial Bank of Taiwan and so on, hold a 55-percent stake in the KRTC. The bureau said that whether the system can continue to operate smoothly “depends mainly on the attitude of the central government and China Steel.” It called for the government stakeholders in the KRTC to inject more capital in order to solve its long-term debt problems. September marks the one-year anniversary of the Kaohsiung MRT’s red and orange lines becoming fully operational. Since that time, the system has been continuously losing money. In order to cover its operating costs, the system must take in over NT$5 million in ticket revenue daily. However, it has averaged only about NT$2.8 million in ticket sales per day. For August this year, the system’s total revenue was approximately NT$100 million, while operating costs amounted to roughly NT$355 million, marking a shortfall of over NT$200 million. In terms of passenger numbers, the system needs to attract about 200,000 riders per day. However, it has only averaged between 100,000 and 120,000 riders. The KRTC said that even on New Year’s Eve, seen as one of the busiest times for mass rapid public transportation, the Kaohsiung system recorded only between 150,000 and 200,000 passenger trips. (SB)