Taiwan’s High-Speed Rail: A Public-Private Partnership Hits a Speed Bump

This report reflects on the timeline and implementation of the high-speed project of the railroad in Taiwan. It discusses the challenges faced by the public-private partnership and provides an evaluation of the quality of FEP activities in the project.

Running head: PROJECT INITIATION MANAGEMENT
TAIWAN’S HIGH-SPEED RAIL: A PUBLIC-PRIVATE PARTNERSHIP HITS A
SPEED BUMP
Name of the Student
Name of the University
Author Note:

1PROJECT INITIATION MANAGEMENT
Introduction
The following report reflects on the timeline and implementation of the high-speed
project of the railroad in Taiwan. The project was started in the year 1980 and continued up to
the year 2009(Garrido et al. 2017). Large stages of analysis of steps are involved in
understanding the potentiality of the given problem like cost-benefit analysis, proper financial
planning and lastly analyzing the feasibility of the project. In the beginning, the project was
considered to be step up as a privately run infrastructure but later the project was taken as public-
private. After completing the operation, the organization was responsible for any kind of
construction and operation behavior (Stalker, 2017). It has ultimately reduced the rate of
leadership and global depression. The private section of the Ministry of Transport and
communication of Taiwan look for a request that corporation is unable to repay the loans. It
ultimately gives the railroad for the given government to easily operate. The final account should
be taken into account behind the final response of above-stated response.
In the coming pages of the essay, an idea has been provided regarding the request of
THSRC. After that, more detail analysis of requirements of FEP has been provided. The whole
process or method of developing PDRI has been discussed. Various concepts and roles of front-
end project manager have been discussed in details. An evaluation has been done regarding the
quality of FEP activities in the project has been demonstrated by making of FEP framework. In
the last section of the report, a proper difference has been provided regarding project success and
project management success.

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Discussion
Taiwan High-Speed Rail Project is expected to be 15 billion dollars’ project. It is
considered to be largest and most challenging infrastructure type of projects in the world till now
(Hsu et al. 2015). It is expected to be scheduled by the year 2005. The 345 km rail system has
been designed for trains which travel at the rate of maximum speed of 350 km/hr. Any kind of
lack of natural resources has made Taiwan independent on the given foreign investment. The
construction industry institute focus in developing a tool which is used in front-end planning
(FEP). This particular tool which is known as project definition rating index (PDRI). PDRI is
much focused to be used in various kinds of industrial projects (Chou, Lu and Chang, 2014).
PDRI tool has been designed for understanding the measures the degree and scope of the project.
It helps in understanding the scope definition of a project and helps in understanding the strength
and weakness of the overall project cycle.
In the 1980s, the economy of Taiwan is much focused on the development of fast and
proper living standards of the locals which has helped in the development of a strategy of the
given country (Li, Schmöcker and Fujii, 2015). Ultimately, economic development has
ultimately come with a demand for transport between Taipei and other cities associated with it.
The given project was proposed a proper outline which has been given by Taiwan High Rail
Cooperation (THSRC). This particular cooperation won the right for construction and focus on
operating in proper handling over the given government. The project come up with massive
investment for a value of 10 billion dollars but it does not lead to a successful outcome for the
given country. There are many reasons for the failure of this particular project. This HSR project
is known to be one biggest privately managed and transport project in the year of 2007.

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In the year 1994, the Taiwan government passed a law which requires the involvement of
both private capital infrastructure projects which is also being applied to THIS project.
Thereafter in the year of 1995, provision engineering officials of High Rail Speed (POHSR) was
changed into the Bureau of High-Speed Rail. It was started to tender THSR which is used for
building operation transfer scheme in the year 1996 (Pan, Lin and Chen, 2015). In the given
bidding method, Taiwan High Rail Consortium (THSRC) focus to run against the Chunghwa
High-Speed Rail Consortium (CHRSC). THSRC was founded by five domestic organizations
and aims in submitting much cheaper things by promising to pay around 3.1 billion dollars. It
expected to build the line with zero net cost for the government and was preferred bidder in the
year 1997. The group can be renamed and formally established as THSRC (Taiwan High-Speed
Rail Corporation) in 1998. THRSC and the government of Taiwan signed a proper agreement in
the year of 1998.
A public-private partnership has ultimately enhanced the importance in construction
project and its operation of a high-speed railway network around the world. By understanding
the measures of Taiwan high rail speed which aims in providing a connection between island
nation between north and south can be considered to be a success (Chou et al. 2017). Between
the year 2006, the number of passenger miles traveling by train in Taiwan has increased a lot.
The frequency of various passengers on domestic’s air has been reduced by 53 percent. By the
year 2009, the high value of ridership on some of the densely populated routes can easily
different organization to easily build the line which can start from turning an operational profit.
However, Taiwanese taxpayers need to pay the much higher price rather than its success is
anticipated. In the initial stage, the private organization needs to pay for the entire cost for
construction of given line. Rather than Taiwan taxpayers need to be just a part of the entire

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project. In the year of 1998, Taiwan High-Speed Rail Corporation (THSRC) has been awarded as
the 35-year of concession which is used for building and operate Taiwan High-Speed Rail. It is
being promised to easily build a system without any kind of government funding. But later on in
the year 1990, the organization started to run difficult after the financial crisis of Asia (Sun and
Lin, 2018). Along with this, the organization has asked to take out loans with a high rate of
interest which is used for paying for the project. Similar to the homeowner, the advertisement
rate of mortgage comes up with a high speed of rate. The high rate of interest has forced the
organization to be financial unsustainability with more than three-fifths of the total income of the
organization. It is mainly required to pay off the debt after that. In the year 2009, the
organization was still paying high interest of 8 percent for some of its loans. Apart from this, the
organization was forced to reduce the value of assets for being much faster which mainly comes
up for traditional assets in the form of ownership. It can easily add to the financial loss to the
organization which can result in financial loss for the organization. It has ultimately lead to a loss
of 2.18 billion dollars for the organization.
As a result of financial for the organization, the shareholders of THSRC singed a
reluctance which aims in investing in further in the given project (Geng, Bao and Liang, 2015). It
has ultimately lead to a large number of difficulty to THSRC in providing security to banks and
kinds of financial institute. The lack of financial support has led to issues with the finishing off
some of the project. The given network was opened to the public in the year of 2007 and several
key stations were considered to be incomplete in nature. For running the operating system, the
government of Taiwan aimed at refinancing the loans of THSRC (Yeh et al. 2014). The
government provided hundreds of million dollars to the given network. Even by the original
method was to build an operational plan for transfer which ultimately stipulating the THSRC to

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easily building a system without any kind of capital from the government. So, government body
has decided to not to make over the given company. It is expressing to take no kind of interest in
growth of the current 40 percent share or any kind of investment for the money to be bailed out.
To resolve the issue of loans in the interest of THRSC of the rate of interest has allowed
it to focus solvent. So, THSRC has come up with a new kind of chairman which has been backed
by the government (Li and Schmöcker, 2017). It allows the government to play more supervisory
in the role of the given organization. The Taiwan rail corporation put some of the challenges.
Firstly, it checks the high dependency on private capital. Similar to many homeowners which
saddle with a high rate of debt of interest at the time of subprime mortgage. The THSRC focus
on a certain number of things which was ultimately being unable to restore the financial health’s.
Even in some of the situation, high service rail service began to turn into some of the operational
profit. It was mainly due to the earlier legacy of high interest which has resulted due to bank
borrowing (Albalate, Bel and Fageda, 2015). Financial projects are known to be public from the
beginning has been proven to be starting has been to be very much cheaper in nature and with
more stability. Apart from this, there should be a reduction in crushing the debt with the load
encountered by THSRC (Ho et al. 2016). Along with this, is aimed at reducing the burden of the
total bailout for Taiwan government. It ultimately refinanced the debt of the whole organization.
Secondly, Taiwan provided an example to provide an idea regarding the dangerous
effects of lock-in. Government of Taiwan provided the THSRC is to look for bankrupt and its
operational activity of high-speed railway activity for its ceasing. The whole activity took place
when the organization ran into financial trouble (Chang, 2015). While carrying the activity
created proper abandonment of some of the critical public assets. The whole project has left the

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government with a little amount of choice but to easily prop up with a failure of business plan for
private operators along with funds from the public.
The public-private partnership is considered to be a useful tool for different government
bodies like Taiwan. It ultimately helps in understanding the importance of large infrastructure
projects in reducing cost and increasing the reliability (Wu et al. 2016). PPP can be designed in
such a way that it can impose a huge risk on both government and taxpayers, wasting of money
and lastly creating initiatives which run counter to the interest of the public. The first thing which
should be taken into consideration that the government should have an idea of what they can get
from it. Taiwan government should enter into PPP (public-private partnership) only when they
can have a clear idea regarding the benefits of achieve. PPP comes with a positive and negative
side for any government body like Taiwan. PPP should provide some kind of partnership for any
kind of project to easily work for reducing costs along with reducing the risk involved in the
private sector (Zhen, Cao and Tang, 2018). Apart from this, PPP aims in improving quality and
timeline for delivery of a project of major infrastructure. PPP undertaking can also aim in
providing some other kind of instance like Ability to easily evade labor or any other kind of regulation which can aim in
pertain government-sponsored project (Rao, Lee and Lee, 2017). Instead of
keeping the whole project which is under the total responsibility of any private
sector.
 Ability to any kind of shift in the cost of the project which is involved in
infrastructure management. It requires an off-balance sheet which can be achieved
by masking the three degrees of public investment in any kind of project (Lin et
al. 2017). It will ultimately encourage the public sector to easily take an

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undertaking of the different project which will help to help in mastering or
accumulation of debt which is hidden.
 Ability to easily pass off the given potential decision has provided an idea
regarding the unpopular decision is accountable for a private entity.
When the government bodies take into the consideration of PPP, the public may deserve
the right to any kind of scrutinize the arrangements. But it can help the government to pursue
them (Ho and Su, 2017). Understanding the reasons for PPP can help in ensuring the agreement
serves for the given purpose. Understanding the project with the help of PPP can help in creating
a certain number of risk for the public sector and can also aim in some kind of agree to have
control over the project. To check whether that PPP project will provide added value or not. The
government of Taiwan should look for comprehensive and proper analysis when it is compared
to the cost of the project (Miraj et al. 2015). They should look for any kind of mechanism which
is looked for saving. A major number of countries should look for a test known as the public
sector comparator. The subject of PSC has been subjected to criticism which can provide the
potential for all kind of changes for the business. The factor also takes into consideration and
assumption for value for money over the passage of time (Lai, Wang and Huang, 2017). The
potential of any kind of change of the test is considered to be big when the government of
Taiwan is subjected to the PPP approach. At the time completing value for money test a
prerequisite should be there for moving with a different project.
Participation of private bodies in different government projects will provide large can
advantages like minimizing cost, improving quality and mitigation of any kind of involved risk.
PPP based projects can provide proper structure in such a way that it can attract competitive bids.
Breaking the high rail projects into the given piece which enable the small piece to provide a

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variety of organization to complete it without any kind of drawback (Saat and Aguilar Serrano,
2015). Since at the time of doing it can easily result in additional interferences which requires
coordination for different sectors.
Conclusion
From the above discussion, it can be easily concluded that this report is all about Taiwan
High-Speed Rail (THSR). It is known to be a network of high-speed rail which runs in the
western side of Taiwan. The project is approx 345 km in length and it runs from Taipei to
Kaohsiung. In the year 1997, the plan of THSR was started. Later on, in the year 2000, the
infrastructure of construction began. The total cost of the project was expected to be 18 billion
dollars. This particular HSR project is considered to be the largest project which has been funded
and managed by transportation project in the year of 2007. The network makes use of a rolling
mechanism for equipment for electrical and mechanical which is being supplied by Japanese-
based Taiwan Shinkansen Corporation. This particular project is also inclusive of signaling and
train control equipment’s, communication system along with the earthquake warning system.
The bullet train of Taiwan incorporated a huge amount of debt. The bailout resulted in improving
performance and three more stations were added by the given route by the end of that year. Later
on, in the year 2016, a new station was opened up in Taipei which helped in having economic
access to some certain specific regions of the city. Two steps have been provided in the above
pages of the essay, which will help THSRC to be bailed out in an easy way.

9PROJECT INITIATION MANAGEMENT
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