CNA
September 23, 2014, 12:01 am TWN
TAIPEI -- The ticket prices for the Taiwan High Speed Rail (THSR) will “definitely drop” after a legislative review in November, Deputy Transportation Minister Chen Chien-yu (陳建宇) pledged Monday at the Legislature amid public dissatisfaction over bullet train fares.
The ministry has said that ticket prices could fall by 7-10 percent, but the extent of the price reduction and when it will take effect will not be decided until the plan is reported to lawmakers in November.
A one-way ticket between Taipei and Zuoying in Kaohsiung in Southern Taiwan currently costs NT$1,630 (US$55), a price that many travelers see as excessively high.
Under the ministry's proposal, that fare could be lowered to NT$1,490, roughly the level it was at before Taiwan High Speed Rail Corporation (THSRC, 台灣高鐵) hiked the price last October to boost revenue and help the financially troubled company whittle down its mountain of debt.
The price cut will be built around the ministry's plan to rescue the company through a restructuring process, Chen said.
Local media have reported that the rescue plan could entail reducing the company's capital by NT$39 billion through a redemption of preferred shares and then engineering a NT$30 billion capital increase that would exclude the company's initial shareholders.
Such steps would be aimed at allowing the government to become THSRC's controlling shareholder, after which the concession period of the system might be extended from the current 35 years to 75 years, local media reports said.
This plan, including an option for THSRC to go public in 2016, could be the company's next move to restructure and rationalize its finances, pending a company board meeting scheduled for next month, THSRC spokesman William Hsu (徐宜中) said.
According to the ministry, THSRC still had accumulated losses of NT$52.2 billion as of the end of 2013, despite having reported annual profits since 2011.
At that time, the assets of THSRC were valued at NT$500.6 billion, with liabilities totaling NT$457.5 billion, the ministry said.
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