After 20 years of political trench warfare and a flawed tender process, travelers arriving at Taiwan’s main gateway, the Taiwan Taoyuan International Airport, will finally get a gleaming new train to take them into Taipei.
The long-delayed Mass Rapid Transit (MRT) line linking Taoyuan and Taipei is finally completed and opened to the public on Feb. 15 following an inaugural period reserved for government officials. In addition to the extended time it took to bu8ld it, it cost the otherwise nimble and industrious Taiwanese US$3.8 billion (excluding land prices) to get the 51 km line running, casting serious doubt on the competence of political decision-makers and officials in charge of public procurement.
Besides serving the airport, the new line will make life easier for tens of thousands of commuters by linking Taipei to many of its low-cost housing satellite cities, including Luzhou, Guishan and Sanchong. Initial reactions by officials and media alike suggest that the involved authorities and contractors have been forgiven for the delay.
The project’s history began with a botched build-operate-transfer (BOT) scheme. In 1998, the project was unexpectedly auctioned to Evertransit International Development Corp, an until then unheard-of construction company based in Taichung. Rumors had it that Evertransit’s sudden emergence was facilitated by its dubious closeness to James Soong, an erstwhile Kuomintang (KMT) heavyweight who was then the governor of Taiwan province.
However, after Soong was denied the chance to run for president as the KMT standard-bearer in 2000, he switched to run unsuccessfully as an independent and became an arch-rival of what was then Taiwan’s dominant political party. That coincided with the weakening of Evertransit’s foothold in the BOT scheme. In 2003 the central government under the Democratic Progressive Party’s (DPP) Chen Shui-bian cancelled the BOT contract, deciding to build the line directly from the government budget.
That complete turnaround delayed the project for years, so that construction began not earlier than 2006.
“The first major mistake was made by awarding Evertransit the BOT contract and the second one was the government’s decision to consider only the lowest bids in the public tender,” said Chen In-Chin, the director of Taiwan’s National Central University’s Institute of Law and Government, in an interview with Asia Sentinel.
“The contract went to [Tokyo-based] Marubeni despite the fact that Marubeni apparently lacked both the financial background and the knowhow for such massive project,” he added.
Although Marubeni contracted to design and build the signaling system itself, the Bureau of High Speed Rail discovered that the company had breached the terms by subcontracting the design of the system to UK-based Invensys Rail Group.
Marubeni delayed the line’s launch six times, which according to the Bureau of High Speed Rail was mainly caused by disputes between Marubeni and its subcontractor.
Marubeni, for its part, countered that inflation pushed up the prices of materials and that the project was continually slowed by political bickering, particularly between 2014 and 2016 when the DPP ruled the local government of Taoyuan whereas the central government was under the KMT.
“In that period an oversight committee identified nearly 5,000 flaws, pushing back completion for another few years,” said Bert Lim, a prominent economist and president of the Taipei-based World Economics Society think tank.
“It was Taoyuan Metro Corp chairman Ho Nuan-hsuan who had the say in that committee, and he went on in June 2016 being promoted by President Tsai as the chairman of [Taiwan’s flag carrier] China Airlines,” he added.
Ho’s appointment raised speculation that it was a reward by the DPP central government for his achievement to delay the line’s completion, Lim said, so that completion fell into the current DPP term rather than into the KMT presidency (2008-16).
The airport MRT saga will thus take a firm spot on Taiwan’s long list of botched BOT projects. It is far from the only one. Another is the high-speed rail system, which in 1998 was tendered to the lowest bidder, Taiwan High Speed Rail Corporation (THSRC). It opened in 2007 and has since then been constantly on the verge of bankruptcy or nationalization.
Also the Taipei Dome complex, a planned multi-use stadium in Taipei, is now a gigantic idle construction site amid ongoing legal quarrels between the contractor Farglory Group and the Taipei city government. It was once seen as a poster child of the BOT scheme.
The Taiwanese highways’ electronic toll collection system operated by the Far Eastern group doesn’t create an appetite for more BOT projects either. The system since its launch in 2013 has triggered countless public controversies, including over allegations that it caused divorces after wives saw toll payment records of their husbands with wrong location inscriptions, an indication they were driving to places they shouldn’t have been.
At the core of the problem arguably is that public construction projects and service contracts are typically awarded to the cheapest bidder rather than the economically most advantageous one. Professor Chen has his doubts as to whether this is going to change.
“Taiwan has a long history of public servants in charge of procurement being indicted, with prosecutors eager to prove that special favors from the contractors were accepted,” Chen said. “By always awarding contracts to the cheapest bidder, these fearful public servants hope to deflect potential suspicion.”
In any case, it’s up and running. And, said Taiwan President Tsai Ing-wen after taking a Jan. 31 test ride: “We hope for a new outlook for the new year as transportation in Taiwan marks a new milestone. The public has waited 20 years. Let us make the wait worthwhile by making sure all preparatory work is completed.”