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The Taiwan Railway Company is scheduled to be listed on New Year’s Day next year. The Ministry of Communications recently discovered that Taiwan Railway’s short-term debt has soared to NT$160 billion.
The Legislative Yuan passed the “Regulations on the Establishment of State-owned Taiwan Railway Co., Ltd.” in May last year. Article 10 stipulates that the government should transfer sufficient assets managed by TRA, and the Ministry of Communications will set up a sinking fund to deal with TRA’s existing short-term debts. Since the adoption of the corporatization regulations of Taiwan Railways last year, the Ministry of Communications has held regular reports on promoting the corporatization of Taiwan Railways, inviting relevant units to discuss relevant sub-laws for the corporatization of Taiwan Railways. In a joint interview with the media last week, Transport Minister Wang Guocai mentioned that the part of debt sharing still needs to be discussed between labor and management.
The Ministry of Communications previously estimated that Taiwan Railway’s short-term debt was 148.447 billion yuan. The official of the Ministry of Communications said that due to the impact of the COVID-19 (2019 Coronavirus Disease) epidemic, Taiwan Railway’s revenue has decreased, and the short-term debt has now increased to about 160 billion yuan. It will be listed next year It may reach 170 billion yuan. The Ministry of Communications originally planned to transfer 3 pieces of land to the Taiwan Railway, including the Taipei Machinery Factory, the designated area of Taipei Station, and the Kaohsiung Port Station of the Taiwan Railway, as sources of income for the establishment of a sinking fund.
Because the Taipei Machinery Factory has been listed as a cultural relic, Taiwan Railway Kaohsiung Port Station now provides Kaohsiung City to operate the Tagou Station Story House, and the real commercial income is the land in the special area of Taipei Station. The Ministry of Communications estimates that these 3 lands earn the most annual income About 1 billion yuan, plus the interest subsidized by the government, it will take more than 40 years to pay off the short-term debt of 148.4 billion yuan. Now that the debt has increased, the repayment period will be longer. Officials from the Ministry of Communications revealed that at a recent meeting, the accounting unit requested that the short-term debt repayment period of Taiwan Railways be shortened to 20 years. The Ministry of Communications originally planned to increase the income of the sinking fund by transferring capacity to the Taipei Machinery Plant, which is restricted from commercial development. However, during a recent meeting with relevant units, it was discovered that it would violate the existing state-owned property law. The accounting unit hopes that Taiwan Railway can transfer other land, or transfer the debt back to Taiwan Railway Company, but not only cannot find suitable land at present, Taiwan Railway Unions are also staunchly opposed to any change and are still struggling to figure out what to do.
Chen Shijie, chairman of the TRA labor union, said in an interview that he hoped that the government would not destroy the mutual trust established with the labor union. The historical debts of the original TRA cooperation policy should all be undertaken by the government. TRA has agreed to allocate 3 pieces of land as a debt repayment fund, and The Ministry of Communications also said that the debt can be repaid slowly, and it doesn’t matter if it takes 50 or 100 years. Chen Shijie said that the Japanese National Railways has been privatized for more than 30 years, and the debts are still being repaid. If the corporatization of Taiwan Railways now shortens the repayment period or returns the debts to Taiwan Railways, the Taiwan Railways union will not make concessions.
According to the corporatization statement put forward by the Ministry of Communications last year, Taiwan Railways has a debt of about 420.801 billion yuan, of which 65.408 billion yuan for the old system pension will be budgeted and subsidized by the Ministry of Communications every year according to actual needs, and there is another 190.974 billion yuan in deferred liabilities , is the property that will be transferred after the completion of the project, non-substantial liabilities, and 15.972 billion yuan is unpaid expenses to the manufacturer, which is a necessary operating expenditure. What Taiwan Railway is really facing is short-term liabilities of 148.447 billion yuan.
Responsible editor: Yu Weining
The Taiwan Railway Company is scheduled to be listed on New Year’s Day next year. The Ministry of Communications recently discovered that Taiwan Railway’s short-term debt has soared to NT$160 billion.
The Legislative Yuan passed the “Regulations on the Establishment of State-owned Taiwan Railway Co., Ltd.” in May last year. Article 10 stipulates that the government should transfer sufficient assets managed by TRA, and the Ministry of Communications will set up a sinking fund to deal with TRA’s existing short-term debts. Since the adoption of the corporatization regulations of Taiwan Railways last year, the Ministry of Communications has held regular reports on promoting the corporatization of Taiwan Railways, inviting relevant units to discuss relevant sub-laws for the corporatization of Taiwan Railways. In a joint interview with the media last week, Transport Minister Wang Guocai mentioned that the part of debt sharing still needs to be discussed between labor and management.
The Ministry of Communications previously estimated that Taiwan Railway’s short-term debt was 148.447 billion yuan. The official of the Ministry of Communications said that due to the impact of the COVID-19 (2019 Coronavirus Disease) epidemic, Taiwan Railway’s revenue has decreased, and the short-term debt has now increased to about 160 billion yuan. It will be listed next year It may reach 170 billion yuan. The Ministry of Communications originally planned to transfer 3 pieces of land to the Taiwan Railway, including the Taipei Machinery Factory, the designated area of Taipei Station, and the Kaohsiung Port Station of the Taiwan Railway, as sources of income for the establishment of a sinking fund.
Because the Taipei Machinery Factory has been listed as a cultural relic, Taiwan Railway Kaohsiung Port Station now provides Kaohsiung City to operate the Tagou Station Story House, and the real commercial income is the land in the special area of Taipei Station. The Ministry of Communications estimates that these 3 lands earn the most annual income About 1 billion yuan, plus the interest subsidized by the government, it will take more than 40 years to pay off the short-term debt of 148.4 billion yuan. Now that the debt has increased, the repayment period will be longer. Officials from the Ministry of Communications revealed that at a recent meeting, the accounting unit requested that the short-term debt repayment period of Taiwan Railways be shortened to 20 years. The Ministry of Communications originally planned to increase the income of the sinking fund by transferring capacity to the Taipei Machinery Plant, which is restricted from commercial development. However, during a recent meeting with relevant units, it was discovered that it would violate the existing state-owned property law. The accounting unit hopes that Taiwan Railway can transfer other land, or transfer the debt back to Taiwan Railway Company, but not only cannot find suitable land at present, Taiwan Railway Unions are also staunchly opposed to any change and are still struggling to figure out what to do.
Chen Shijie, chairman of the TRA labor union, said in an interview that he hoped that the government would not destroy the mutual trust established with the labor union. The historical debts of the original TRA cooperation policy should all be undertaken by the government. TRA has agreed to allocate 3 pieces of land as a debt repayment fund, and The Ministry of Communications also said that the debt can be repaid slowly, and it doesn’t matter if it takes 50 or 100 years. Chen Shijie said that the Japanese National Railways has been privatized for more than 30 years, and the debts are still being repaid. If the corporatization of Taiwan Railways now shortens the repayment period or returns the debts to Taiwan Railways, the Taiwan Railways union will not make concessions.
According to the corporatization statement put forward by the Ministry of Communications last year, Taiwan Railways has a debt of about 420.801 billion yuan, of which 65.408 billion yuan for the old system pension will be budgeted and subsidized by the Ministry of Communications every year according to actual needs, and there is another 190.974 billion yuan in deferred liabilities , is the property that will be transferred after the completion of the project, non-substantial liabilities, and 15.972 billion yuan is unpaid expenses to the manufacturer, which is a necessary operating expenditure. What Taiwan Railway is really facing is short-term liabilities of 148.447 billion yuan.
Responsible editor: Yu Weining
In summary, the Taiwan Railway Company is set to be listed on New Year’s Day next year, but the Ministry of Communications has discovered that their short-term debt has soared to NT$160 billion. Despite the government’s efforts to establish a sinking fund and transfer assets managed by TRA to deal with the debt, the impact of the COVID-19 pandemic has caused a decrease in revenue and an increase in debt. Now, there is a struggle between labor and management on how to shorten the repayment period or transfer the debt back to Taiwan Railway. As the discussion ensues, it remains to be seen how Taiwan Railway will navigate this financial challenge in the future.