TAIPEI - Taiwan's high-speed rail system, which uses Japanese shinkansen bullet-train technology, is caught in a financial crunch after eight years of service. High depreciation expenses and interest payments have left the company deep in the red.
Taiwan High Speed Rail, the company that operated the bullet trains, may go under "as early as in March," warned a Taiwanese official.
"We should have done more ," Yeh Kuang-shih said, announcing his intention to resign as the minister of transportation at a Jan. 7 press conference. The Transportation Committee in parliament rejected the ministry's plans to improve the company's finances. Tony Fan, chairman of Taiwan High Speed Rail, also tendered his resignation.
Taiwan's high-speed train lines are the first to adopt shinkansen technology outside Japan. They began operating in 2007 under a build-operate-transfer agreement with the Taiwanese authorities. At that time, the company projected that the number of passengers would reach 240,000 a day in 2008. Even in 2014, however, a little more than 130,000 use the train a day.
The high-speed lines cost 480 billion New Taiwan dollars (S$20.7 billion) to build. Heavy depreciation charges and interest burdens have led to accumulated losses totaling NT$47 billion at the end of June 2014 for Taiwan High Speed Rail. It logged a net profit of NT$3.2 billion in the year ended in December 2013, too small to see any sign of eliminating the cumulative debt.