Work on new high speed rail stations to begin in January: Mao

Taipei, Sept. 29 (CNA) The construction of three new high speed railway stations in Miaoli, Changhua, and Yunlin counties will begin in January 2010, Minister of Transportation and Communications Mao Chi-kuo promised Monday.

If the construction begins on schedule and proceeds without any major delays, the new stations will be completed by June 2015, 66 months after the launch of construction as stipulated in the contract between Taiwan High Speed Rail Corp. (THSRC) and the Bureau of High Speed Rail under the Ministry of Transportation and Communications (MOTC).

Mao announced the timetable after talks with THSRC Chairman Ou Chin-der, Changhua County Magistrate Cho Po-yuan, Yunlin County Magistrate Su Chih-fen and Deputy Miaoli County Magistrate Lin Chiou-hsiang.

Ou said last week that work on the three stations would have to be postponed to keep the costs of the financially troubled THSRC under control as it worked its way out of its financial morass.

That raised concerns among the leaders of the three local government leaders that the station projects, which they believe will help stimulate their local economies, would be canceled, and they visited Mao and Ou to secure a commitment that construction would proceed.

At Monday's news conference, Mao reiterated that the high speed railway is a matter of public policy and cannot be constrained by financial problems.

"Out of consideration of social fairness and justice, " people in the three counties that are offering land for the rail line should have the right to enjoy the advantages of the railway system, Mao said.

He noted that the construction of the three planned stations will begin soon after the THSRC board of directors and the company's outstanding debt are restructured in November.

THSRC, a private company that built the 345-kilometer high speed railway and operated the line under a build-operate-transfer (BOT) contract with the government, has been mired in losses, primarily due to high interest expenses and depreciation.

Since beginning operations in January 2007, it has accumulated losses of over NT$70 billion (US$2.15 billion) as of the end of June -- about 66 percent of its paid-in capital of NT$105.3 billion -- and total debts of more than NT$400 billion.

The government formally got involved in the debt-ridden company's management last week, after THSRC's board accepted former Chairwoman Nita Ing's resignation and replaced her with the candidate representing public shareholdings in the company, former CEO Ou Chin-der.

The cost of building the three stations -- an estimated NT$7.5 billion -- presents another challenge to the government as it attempts to sort out the company's finances and reduce its debt exposure.

According to MOTC Vice Minister Yeh Kuang-shi, THSRC has already begun negotiating with banks on refinancing existing loans, but the discussions have not yet touched on financing to build the new stations.