INTRO: Next month is due to see the selection of a preferred bidder for a build-operate-transfer concession to build Taiwan’s long-planned Taipei - Kaohsiung high speed line. The government hopes to have the 340 km route open by 2003

BYLINE: Dr Ching-Lung Liao

Director General, Bureau of Taiwan High Speed Rail

WITH A population of 21·3 million crammed into a land area of less than 36000 km2, the island of Taiwan has long been an economic powerhouse of the Far East region. Around 95% of the population lives in the western coastal plains, which stretch from Taipei in the north to Kaohsiung in the south. The coastal belt is served by Taiwan Railway Administration’s main line, electrified in the early 1980s, but steadily growing traffic and overcrowding on the parallel motorway are signals that something better is needed.

For the past decade, planning has been under way for a 340 km high-speed line linking the 10 principal cities in western Taiwan. Studies suggest that ridership will be around 200000 passengers/day at opening in 2003, rising to 292000 per day by 2010. The government has now made a substantive decision to build the line, and a preferred consortium to carry out the work is due to be selected next month.

The line has been designed as a purely passenger route, with conventional steel wheel on rail technology. The guideway will be aligned for a maximum of 350 km/h. To reduce land severance, over 75% will be built on viaduct, with the remainder a mix of bored tunnel, cut-and-cover, and embankment.

Trains will be able to run at headways down to 4min during the 2h peak periods morning and evening. Each train must have a minimum capacity of 800 seats, and a basic service offering no less than 300000 seats per day is required. Running time for the 340 km Taipei - Kaohsiung journey is envisaged as 90min for express services with a single 3min intermediate stop at Taichung. Regular trains will take 120min, including 2min stops at four selected intermediate stations.

The total project cost is approximately US$17bn, of which 44% will be allocated to civil works, 19% to the ’core system’ (rolling stock, signalling, catenary and power supply), 16% to land acquisition, 4% to trackwork, and 3% to stations (Fig 1).

Following the global trend of privatising state-owned enterprises and transferring investment projects into the private sector to relieve financial burdens on government, the high speed line has been chosen as the first transport infrastructure project in Taiwan to be implemented using the Build-Operate-Transfer model. To make the scheme commercially viable, the government will be responsible for acquiring land, and will assign property development rights around the stations to the concessionaire.

Three-part BOT concession

In fact, the government will grant three parallel rights to the concessionaire. The first is the right to finance, build and operate the high-speed line itself, running from the northern depot site at Hsichih, northeast of Taipei, to Kaohsiung, including stations, depots, maintenance bases, and related facilities. This concession will run for 35 years from contract signing, providing periods for construction and operation.

A second concession gives the promoter the right to conduct ancillary businesses as approved by the government. In principle, this will run for the same period as the main concession, but is negotiable. The third right is for the concessionaire to develop property at the stations and maintenance bases, including interchange facilities, car parks, retail plazas, green areas, and other real estate development. The government will adjust the development rights to reflect the scope of work and level of investment proposed by the winning bidder, but the concession period will not be longer than 50 years from the takeover of the land.

Following the decision to go ahead with the project, the former Provisional Engineering Office of High Speed Rail was renamed the Bureau of Taiwan High Speed Rail, and authorised to start land acquisition for the route.

BOTHSR’s major task at present is to evaluate bids for the BOT concession and select the best applicant. The evaluation process has been divided into two phases, with the first task being to identify prequalified applicants. Two private groups, China Development Corp and Taiwan High Speed Rail Consortium, submitted proposals based on Japanese shinkansen and European TGV and ICE technology respectively. Both organisations passed the Phase 1 review and were formally prequalified on February 22 1997.

During Phase 2, intensive meetings were held between BOTHSR and the two groups, to discuss and clarify various investment terms and the rights and liabilities between the government and the private investors. This period finished at the end of June, after which BOTHSR issued on July 15 a set of ’Supplementary Documents of Instructions to Application’. These are the basis for the two groups to draft their investment proposals, and for subsequent contractual negotiations between BOTHSR and the preferred bidder. Final investment proposals were due to be submitted by the end of August, and the selection of the preferred bidder will be made by the Ministry of Transportation & Communications by November 30 1997.

Partnership agreement

The partnership between the government and the BOT concessionaire will be based on a complex investment arrangement, government will be directly responsible for about 28% of the total project cost, the BOT concessionaire for at least 40% of the total, and the remainder will be funded by the government but implemented by the concessionaire.

The government will be responsible for handling and funding directly all land acquisition (approximately 1200 ha for the new line and 93ha for station area developments). It will manage the civil works for the underground section between Nankang and Panchiao in the Taipei metropolitan area, excluding trackwork and E&M facilities. The government will also be responsible for administration and supervision.

Other than these three areas, the BOT concessionaire is free to include all other works within the scope of its investment proposals. Anything not included in the proposal will be treated as ’remainder’ works - which is primarily expected to cover civil works for construction of the guideway; this will be funded by the government but managed by the concessionaire.

The actual works to be included in the BOT investment will be finalised as part of the bidding negotiation and selection process, but the following items shall be included as a minimum: