INTRO: Taiwan’s Minister of Transport & Communications Mrs Chu-Lan Yeh envisages that a privatised national railway will one day complement the role of high speed line operator Taiwan High Speed Rail Corporation. Murray Hughes interviewed her in Taipei

Hughes: You have a very unusual situation in Taiwan in that a private sector operator has been established to run a high speed line while the national rail network remains state-owned. What relationships exist between the government and the two railway organisations?

Yeh: Taiwan Railway Administration is a state-owned enterprise with a very long history that plays a vital transport role on our island. But in recent years it has faced competition from new highways, airlines and other transport. Because of the constraints of state ownership, TRA’s services have gradually become degraded - it operates within very restrictive rules. This has made it less competitive, and there is a need to improve its position. But all its staff are public servants, making it difficult to increase the organisation’s efficiency. That’s why we are actively pursuing privatisation of TRA. But first we must introduce reforms in an initial stage of preparation.

THSRC has a BOT contract and is in the private sector, and the MOTC’s relationship here is as a partner. We have undertaken to give full support to THSRC, and while we don’t interfere with the detail of contracts or become involved in the documentation, we are helping with land acquisition, for example. This is a win-win situation between the government and the private sector.

Hughes: So will there be competition between THSRC and TRA?

Yeh: We see the functions and roles of the two organisations as being quite different. TRA will perform a short-distance inter-city role, and THSRC will operate the long-haul route between Taipei and Kaohsiung. With one intermediate stop, THSRC trains will link the two cities in 90min. In fact, THSRC will eventually have one station in each of 10 cities. TRA, in contrast, will have several stations in these cities and will provide a different kind of service.

Hughes: That means that the two organisations will co-operate then?

Yeh: It is really too early to talk about this. We are preparing for the privatisation of TRA, and of course we have to consider TRA’s employees. After TRA is privatised, it will work with THSRC and have a complementary role. Both organisations will be in the private sector, so we don’t see any difficulty.

Hughes: What form of privatisation do you envisage for TRA?

Yeh: TRA’s assets are worth around NT$600bn, but it has an annual deficit of NT$8bn. We still do not have a final idea on how to privatise TRA, but it is important that management and operations work effectively during the transition. One option we are considering is the separation of infrastructure and operations. But whatever happens we have to bear in mind the rights of employees and to ensure that daily services are maintained. Involving the employees is important as they need to participate in the process of privatisation. n

CAPTION: Premier services on TRA’s west coast route (top) will be overtaken by THSRC’s high speed line. TRA’s role will focus on short-distance urban and suburban passenger trains (below) and its residual freight business (below left)