By Queena Yen, The China Post
TAIPEI, Taiwan — If the Taiwan High Speed Rail Corp. (THSRC) financial restructuring plan is approved Monday at the Legislative Yuan, train tickets are likely to go back to 2013 prices by the end of January, according to Minister of Transportation and Communications (MOTC) Yeh Kuang-shih (���J��).
However, if things go differently next week, the government will start to prepare for taking over the THSRC in March next year. As the THSRC faces a financial crisis and is on the verge of going bankrupt, Yeh went to the Legislative Yuan yesterday to make a report on the financial restructuring plan and seek support from lawmakers to continue the operation of the corporation. Yeh’s plan includes extending the company’s concession period from 35 years to 75 years, buying back preferred stocks, increasing capital and cutting ticket prices.
Democratic Progressive Party lawmaker Lee Kun-tse (�����A) said that the THSRC is expected to buy back preferred stock valued at NT$39.2 billion and its interests at NT$14.1 billion. However, there is only NT$43.6 billion in the THSRC special account. Therefore, what the MOTC needs to do is to negotiate with a state-owned commercial bank to temporarily stop requests that the company pay back its debts. A prolonged financial reformation will not solve the problem, said Lee.
Responding to Lee, Yeh said that the MOTC has already spoken to the bank. The bank said it will unfreeze the special account on condition that the Legislative Yuan approves the new financial reformation plan and extends the concession period. Yeh continued by saying that if the financial reformation plan does not pass before the year ends, the company will announce bankruptcy next March as one stockholder plans to buy back its NT$3.5 billion preferred stock. The problem will become more complicated at that time if the government needs to take over the company, stated Yeh.
As for reducing ticket prices, Yeh stressed he hopes that prices will go back to 2013 levels after the plan has been approved and launched. It would mean that a one-way ticket from Taipei to Kaohsiung would go from NT$1,630 to NT$1,490. However, the decrease would have some impact on stockholders’ interests, which may also affect the company’s ability to find new investors when it tries to increase its capital.
Launching the Financial Reform Plan is Necessary: Yeh
Regarding legislators meeting next Monday, Yeh said he feels cautiously optimistic that the plan will be approved as it is a necessary and responsible move to save the company for the best interests for everyone. If the government takes over the company next year, it may have bad consequences not only for the government but also the people.