Efforts are underway by the Taiwan government for a government led restructuring to avoid bankruptcy (Plan to stop Taiwan’s high-speed rail going bust set for review). Since opening in 2007, this privately financed and operated system has been plagued with ridership well below projections. The Taiwan experience is consistent with the research showing that ridership on high-speed rail lines has been frequently over-projected.
Minister of Transportation and Communications (MOTC) Yeh Kuang-shih offered this sobering assessment:
“This is not the best time to address the financial problems, but it is the last window of opportunity. The Taiwan High Speed Rail Corp will definitely go bankrupt if the problems are not addressed by the end of the year. The only other solution would be a government takeover. If the company files for bankruptcy and the government is forced to take over operation of the system, the banks will probably collect on their loans, but neither large nor small investors will get anything back.”
Kuomintang Party legislator Lin Kuo-cheng said that the “debt” and “accumulated losses” mean that the Taiwan high speed rail line is “broke.”
[Originally published at New Geography]
Wendell Cox is a consultant specializing in urban policy (housing, land use, transportation, governance), demographics and intercity transport and a policy advisor to The Heartland Institute.
