# Taiwan HSR near bankruptcy.



## Railsupporter (Oct 12, 2014)

http://blog.heartland.org/2014/10/taiwan-high-speed-rail-near-bankruptcy/ Rail don't have to be profitable...


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## firstcultural (Oct 13, 2014)

I recall them running into financial trouble a few years ago as well. Last time I was out there (earlier this year), much land around the stations (most of which are miles from existing downtowns) was yet to be developed - probably a big reason the number of riders aren't meeting expectations.


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## Tokkyu40 (Oct 13, 2014)

You may note that the article was written by Wendell Cox of the Reason Foundation. His reputation for scholastic integrity and objective assessment are such that if he said rain was wet I would wait for independent confirmation before going out on a limb.
He's the man who told us that the Tokaido Shinkansen ($2billion annual profits) was a financial failure.


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## jis (Oct 14, 2014)

Ah yes! He does have a mission, and truth and facts be damned if they are inconvenient and get in the way.

Sent from my iPhone using Amtrak Forum


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## Metra Electric Guest (Oct 14, 2014)

Take this with a grain of salt (advance warning). One of my best friends lived in Taiwan and the impression of the country I got from him was a) corruption was rampant, or at least cronyism and b) infrastructure wasn't always maintained well (witness the huge gas explosion earlier this year for instance). So it wouldn't be a surprise that there were financial problems with the HSR, especially since I've heard this for years.

My friend went back after the metro was built in Taipei and he was very impressed with it. But what impressed him, especially while living there, was a visit to Japan, where all the infrastructure, such as trains, was clean and ran on precision time, unlike Taiwan. I should note that he likes Taiwan, just that there are faults there, like anywhere else.


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## Bob Dylan (Oct 15, 2014)

IINM George Harris, our resident expert engineer worked in Taiwan on Rail, possibly on this project?

I'm sure George has some good insight to share! Paging George!!


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## Tokkyu40 (Oct 19, 2014)

Thee was one legitimate problem I read about elsewhere; the project was built where the land was cheap, which means the terminals are at the fringe of the cities rather than downtown. Revenues have been increasing as the cities have built out to meet the trains.
This is the same effect as the Yamanote line around Tokyo. Originally built to bypass the built up areas, the stations became the focus of considerable growth until the city surrounded the line.


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## NW cannonball (Oct 20, 2014)

Tokkyu40 said:


> Thee was one legitimate problem I read about elsewhere; the project was built where the land was cheap, which means the terminals are at the fringe of the cities rather than downtown. Revenues have been increasing as the cities have built out to meet the trains.
> 
> This is the same effect as the Yamanote line around Tokyo. Originally built to bypass the built up areas, the stations became the focus of considerable growth until the city surrounded the line.


So, possibly, with the world-wide recession, the land values didn't escalate fast enough to make the project profitable, however it was financed?

Not that railroad (or airline, or steamship) bankruptcies are unusual  Far from it!


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## Tokkyu40 (Jan 27, 2015)

The latest news.

http://www.chinapost.com.tw/commentary/the-china-post/joe-hung/2015/01/19/426848/Whats-wrong.htm

The line has developed and is now profitable, but it's overbuilt for the application and the debt level is too high without reorganizing the debt.
Since the government is against reorganizing the debt they might be forced to spend NT$700 billion ($22.5 billion) to buy the system after bankruptcy.
Politics at work.


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## Bob Dylan (Jan 27, 2015)

IINM George Harris, our resident rail engineer ( now retired) worked on this system, we haven't heard from him in awhile but he should have insight on this matter if still with us?!


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## jis (Jan 27, 2015)

Tokkyu40 said:


> The latest news.
> 
> http://www.chinapost.com.tw/commentary/the-china-post/joe-hung/2015/01/19/426848/Whats-wrong.htm
> 
> ...


This would indicate the government actually wants nationalize it rather than try to keep it in private hands. Which is all well and good. But wasn't it the same government that initially went along with the high level of debt? It was not like commercial banks said, oh yeah we love to take on that risk, without some goading from the government. At least that is how most of these things seem to work in Asia anyway. I doubt that Taiwan is any different.


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## George Harris (Jan 27, 2015)

http://www.chinapost.com.tw/commentary/the-china-post/joe-hung/2015/01/19/426848/Whats-wrong.htm

First, its a newspaper article. The China Post was never a promoter of the system. I would take everything they have to say with a large grain of salt. Yes, there are things that could have been done better, but on the whole it was done very well and is very good for the island and has proven exceedingly useful. Use of the Shinkansen system did not make it more expensive than it would have otherwise been, and the Shinkansen system was developed for the nature and density of the population in that part of the world. To have used a European system would most likely have been a disaster.

I was there about 2 years after it opened. All seemed well, and the ridership looked to be quite good.

It sounds like they are now having a positive cash flow. That undoubtably encourage an element of those in the government to try to squeeze out the investors so they get the money rather than the original investors getting their money back. JIS has it right. What will really happen I can only guess.


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