2 billion dollar loss/ 14 billion debt for HSR

chinapost.com.tw/taiwan/loca … ovt-to.htm

Two billion US dollar loss last year and 14 billion Us dollar in the hole in debt. Not a pretty picture for the HSR. May have been a train set the kid couldnt really afford and put on his credit card anyway.

Should it have been built? I think yes and I think the govt has to take it over basically.

edit: I read somewhere else that its 2 billion USD loss over 2 and a half years. Well thats better then 2 billion a year. Still hefty though.

I found the prices are too high for HSR. I only used it once, and while it was nice and fast, I cant justify the extra cost.
But I guess, compared to Japan, the price is reasonable.

There was one station that the train stopped at that was virtually empty, and my Taiwanese friend said that it some people had considered it a mistake to build one there (i think it was jiayi) The Tainan station is out in the middle of nowhere.

During the middle of a weekday, only 1/3 of the seats were filled.

I personally love it. It also gets my wife home faster from Taipei on Thursday nights. It is great when traveling from Taichung to Taipei with a small child.

The reason they racked up so much more debt is due to the govt putting the project on hold for a year. www.amcham.com.tw topics magazine had a nice article about it. I doubt any future BOT project will ever get off the ground after the HSR debacle.

Interesting point is what happens to the debt when the govt takes it over.

I spent a good half year going back and forth between Taipei and Kaohsiung on it every week…on weekends they seem to do pretty good business, but I don’t know if the demand is there for weekdays, barring some crazy price drop.

Obviously there can’t be a huge gap between weekend and weekday prices as well, but you have you figure their pricepoints are off for the current demand. The priority should be filling those suckers up more…even if you’re still taking similar losses short term, you introduce more people to the service and get them hooked long term when demand permits a price hike (it’s quite a good ride).

And profits aside, more people having access to the service is good for Taiwan, and good for the economy. Travel = money spent.

Now you have to be a math graduate to understand their matrix of price discounts.

Dropping it overall by even 20% won’t help.
Service / price issues is the GAP.

How in hell can you expect to promote a system from which the last train leaves Kaoshiung at 22.12 PM already?
If people pay a high price , they expect a better service (stretched availability - no matter if there are only 5 persons on board)

Love HSR. The Pixie and I took mother and daughter south this weekend. Took HSR down and the regular train back. I don’t care that HSR costs twice as much or more: the time and hassle saved are more than worth it, particular with an infant in tow. Building stations out in the boonies was an obvious error, as was the lack of integration with other transportation networks. But then, I don’t expect much sense to creep into such things here.

The HSR company expected half their money to be made developing the land around the stations into small cities and tourism centres. The Jiayi station for example was supposed include the southern Palace Museum and be a gateway to Alishan. Not going to happen now. There’s no interest in building more cities.

The other source of profits was supposed to be from business travel. This made sense when the project was conceieved 15 years ago and 1 million business professionals were still here and not China. So in essence the HSR was built for a country that no longer exists, but also for one that doesn’t yet exist. Interesting bind but I suspect in the long run it will be of benefit as smaller rail systems connect it to the rea; urban centres of Taiwan (as Tainan is now doing).

I also love the HSR (even if I think some of their staff has a bad elitist attitude or just bad training). :slight_smile:

That they build the stations mostly out of town has two advantages:

  1. Make new development zones
  2. Reduce congestion

Considering the liquidity of the current stake holders I doubt the debt is really an issue.
Problem is can they be profitable one day or get out of the debt?
Currently I don’t think so cause their non-train-operation cost is way too high.
How much money they spend on each station’s operation?
They are huge and the air condition there seems to work very well (too well?) with wide open doors to the trains in the same time.

Other flaws:

  • You can’t buy tickets online. Yes you can reserve online but if you do so you must pick up the ticket 30 minutes before departure. If you pay online the only benefit is that they give you 5% discount. You still must be there 30 minutes before train departure (latest). In Europe these days (suppose for trains the most advanced) you can just print them yourself with a bar code.
  • Whats with the dreaded machines who only return change in coins? The solution provider of their payment machines seriously screwed up things. If you go to Taipei one way from Hsinchu (290 TWD) and you only have a bill of 1000 TWD you will end up with 14x 50 TWD coins + 10 NT coin in exchange. There are “Exchange” machines next to the machines you pay (extra electricity). Of course they only accept to change up to 500 TWD (or was it 300?) at once. You can’t change a 1000 TWD bill. If you decide to pay by card it goes very smooth (if you are lucky enough that your bank is in their list of accepted banks, mine is). One tip here: If you have a Taiwan debit card (i.e. Mega Bank) select Credit Card not Debit Card when paying. In this case you save time cause you don’t have to enter the pin and the money will be deducted 6 days later. Whereas when you select Debit Card and enter the pin it will be deducted from your account at once (even on the weekend).
  • They could have more sale in the waiting area (after passing the barriers) of the “smaller” stations.
    200 people waiting 15 minutes for their train just watching one small TV channel in Hsinchu without any stores around reminds me of people-packed Vienna/Austria at New Years Eve with every store closed down.
    That’s definitely not the Taiwan-way :slight_smile:
  • No possibility to buy a pack of 10 tickets.

It may all have been too ambitious of private enterprise in Taiwan to tackle one of the worlds largest (if not THE largest) B.O.T projects. Heard that the main backers EXPECTED not to be able to turn a profit from operations and EXPECTED the govt to bail them out eventually while they quietly siphon off huge amounts of dosh from land developments. Simple formula, invest big , borrow HUGE and go backrupt on paper while pocketing BIG TO HUGE amounts from land development. Is it all going to plan? :ponder: :ponder:

The level of money borrowed basically means that most of the TWO BILLION US DOLLAR deficit from last year alone was likely in the form of INTEREST PAYMENTS. Its clear that the project numbers were unrealistic for private enterprise.

Only a govt can borrow up to 14 billion US dollars and service the debt (with its national bank at deeply discounted interest rates) while waiting 30 plus years for capital return. Look at the Taipei MRT. Sixteen US Billion dollars spent, another 16 Billion US dollars halfway spent. Although widely successful operationally, if it had to shoulder a market rate for the amount of money borrowed, it too would be in debt.

Huge megaprojects like the TAipei MRT and the Taiwan HSR really could only be possible on a government basis. The private involvement in the HSR was all a big ruse to grab profits from LAND development while letting the govt pick up the bag for the HSR itself. Its too big to let fail.

Taiwans govt can let the Muzha Gondola fail (few even remember about that at this moment) while the HSR cannot be allowed to fail. Simple as that.

True about teh land "deals’. Yesterday the news was stating a feeding frenzy on the fact that even two year olds got a nice several billion nt pie… more to come.

Taiwan can’t afford it. It cost a fortune to build and will cost a fortune to to maintain yet the tickets are only a couple of thousand NT - which is expensive for people in Taiwan. It’s cool and all, but economically viable? Not unless the tickets prices are subsidised by the government, so, erm, not.

When the train was under construction I talked with a lot of engineers and management person that had a drink in Taichung (many of them were based in Taichung where one of the main train depot is). They said the lack of attention to quality by the local contractors is the main issue for the delays. I think even now many foreign companies are involved in the maintenance of the system. I just hope they keep the maintenance up.
It might be good that they choose a Japanese train system as Japanese are known to be extremely nosy about checking every detail when it comes to QA.

Not sure if the “new development areas” pay up for all that cost. Probably not.
But its not the first train in the world that has cost issues (actually is there any which hasn’t?).

I love the HSR and take it at least twice a week between Hsinchu and Taipei. About NT$300 each way. To me, this is a good deal compared to driving (NT$80 toll each way plus gas plus parking).

When I ask my colleagues if they take HSR to their hometowns (Taipei, Taichung), they get really excited and tell me how expensive it is. They can all rattle off the price of an HSR ticket, train ticket, and bus ticket at the drop of a hat. Almost all opt for standard train or bus.

It’s never going to turn a profit, it may run at a day-to-day profit against it’s running costs but I seriously doubt it will ever make enough to pay back the cost of building it in the first place.

Somethings on it are brilliant, it’s easier/better than taking the plane from TPE to KHH but for a shorter distance it can’t compete with the buses.

I love the HSR; it’s fast, smooth, comfortable, modern, well-kempt, and the trains are on time. The stations are wonderful, almost like little spaceports, and the tickets really aren’t that expensive for what you get. If they didn’t have the massive debt, they’d be making money.

A friend of mine whose company worked on the project said it was hell trying to get the stations closer to the urban centers, due to the strange NIMBY syndrome you get sometimes (you’ve probably seen stories in the newspaper about people protesting MRT stations being built near their houses, despite the fact that their property values would skyrocket as a result) as well as people who wouldn’t settle with them to allow their houses to be knocked down for construction. So the stations all ended up in the boonies, with the exception of relatively cosmopolitan cities like Taipei and (sort-of) Kaohsiung.

Good points. Imagine oweing 14 billion to the bank at 10pct/annum interest rate? That would amount to one point four billion a year in interest. Not saying that is what the HSR is paying to the banks. But thats where the govt needs to build something so massive because the govt owned bank can finance such a project at greatly reduced rates, say one percent per annum. The HSR is most likely OPERATIONALLY a money maker. Just that it cant make enough to satisfy the interest on the loan, let alone pay off capital.

And it takes a LONG LONG time for it to reach a high enough average occupancy like the Taipei MRT has. NOte that the Kaohsiung KRT is also losing big bucks.

Even the TRA , the regular rail has been losing money for years because it cant make enough to satisfy its pension liabilities.

Both systems are white elephants economically but NOT in what they bring to the table for people living in TAiwan.

The HSR has doomed domestic air transport in Taiwan, but itself is flawed as a standalone economic entity. But not a failure by any means in what it means to have that for the people of Taiwan.

Its success needs to be measure by a different yardstick. I loved the few short rides i took on it when i visited Taiwan a few months ago. I wished I had more time to ride the entire system.

I love the HSR; the trains and stations are top notch. Unfortunately when you factor in the time it takes to travel the distance between the station and wherever you need to be it makes no sense. It actually works out faster for me to take the slow local train.

The kids love it but if I need to get to Taipei or Taichung quickly I rely on other options.

the biggest mistake as pointed out in this thread was building the terminals so far out of town.

in Taipei it is at the train station, but most other places its location is bufangbian, and its fangbianess is compromised when you have to take time to get to the actual terminal.

judgment of everything in this country revolves around its fangbianity and when you add a taxi/bus ride to the terminal to the length of the journey (of the HSR) the bus or train might be a little less bufangbian.

I like it. Sometimes. For Taichung, though, its fucking useless. Last time I went, I took the HSR and it took something like 3.5 hours by the time you factored in MRT, waiting, train connections from frigging Wuri… what a joke! Twice the time it takes by car and 10 times the inconvenience. Never again!

If you live in Changhua and use your own transport to the station, Wuri is actually really convenient. It gets my wife home 60-90 minutes earlier than normal on the one day she works a week in Taipei.

I am wondering why this is becoming a problem considering it was in the English press around 6 months ago. I mean if foreigners know and are thinking about it. :doh: