ON November 26 Taiwan High Speed Rail Corp finally agreed to pay US$65m to the Eurotrain consortium formed to bid for the electrical and mechanical equipment on Taiwan’s 346 km high speed line between Taipei and Kaohsiung.

Eurotrain, consisting of Alstom and Siemens, was given a letter of intent in 1997, but THSRC announced in December 1999 that it had chosen the Japanese-backed Taiwan Shinkansen Consortium as the ’priority party for negotiation’.

In 2000 Eurotrain sought redress through legal means, and arbitration followed in Singapore and New York. The International Chamber of Commerce ruled on March 15 2004 that THSRC should pay Eurotrain US$73m compensation for breach of contract, but THSRC appeared reluctant to pay. We understand that pressure was brought to bear, triggering last month’s settlement. Concern remains in Taipei that the government rather than THSRC is footing the bill, an arrangement that would be manna for those who claim that the nominally private-sector project is bankrolled by the state.

Chairman & Chief Executive Officer Nita Ing told us last November that THSRC needed ’a lot of luck’ to meet the target opening date of October 2005. Given the brouhaha now brewing in Taipei, THSRC will need more than luck. We have referred in the past to Japanese concern about mixing Shinkansen and European high speed technology on the project (RG 9.01 p557).

Specific issues have now surfaced in the public domain, and an article published in a Taiwanese periodical last month painted a gloomy picture. According to Next Weekly, a retired Shinkansen engineering specialist has confirmed that Japan wanted to win the E&M contract to ’save’ the country’s rolling stock builders, the quid pro quo being a visit by former Taiwanese President Lee Deng-Hui to Japan for political reasons.

In Japanese eyes, the deal was for Japanese firms to supply practically all equipment not in the civil engineering contracts. But THSRC had specified high speed turnouts that were not available in Japan. These were sourced from Germany, although Japanese profile rail is used throughout. Japanese engineers then specified that Rheda slab track should be used for 300m on each side of the turnouts.

The combination of German and Japanese equipment caused grave concern among engineers at JR Central, which has provided technical support to TSC, not least because the 51 trains being built for Taiwan are derivatives of its own Series 700. More than anything, JR Central was anxious that the Shinkansen’s superlative safety record should not be placed in jeopardy.

All this escalated into a crisis last September, when JR Central issued an ’ultimatum’ to THSRC over 20 issues, saying it would withdraw its support unless the ’deviations’ were resolved. Apart from the track, a major concern is the signalling and train control, which is intended to be a modified version of the Shinkansen ATC adapted for bi-directional operation, with which JR Central engineers are not familiar. Hence writing training manuals and staff training will entail different procedures from those on the Shinkansen. Another concern is earthquake protection, which is high up the agenda following October’s derailment.

How all this will be resolved is by no means clear, but it is now certain that the deadline for commercial service in October this year will not be met.