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from the Financial Times:
Bullet trains set to bring Taiwan mixed blessings
By Kathrin Hille in Taipei
Published: January 3 2007 00:00 | Last updated: January 3 2007 00:00
Business may be slow for Hung Kuo-yu, who runs a small grocery shop on the outskirts of Zuoying, a grubby suburb of Taiwan’s second-largest city Kaohsiung, but when he leans from his doorway and looks down the deserted street he sees a reason for optimism.
At the end of the road, towering over shacks of sheet-iron and 30-year-old three-storey shops, is a gleaming airport-like structure.
Zuoying is the southernmost stop on the Taiwan High Speed Rail that will connect the capital, Taipei, to Kaohsiung, the southern port city that is home to the island’s largest naval base and heavy industry.
On January 5 the rail link officially opens for business and 18 trains will arrive in Zuoying daily, giving Mr Hung good reason to believe that travellers will flood his quiet neighbourhood and bring him more business. “If things work out well and land prices rise, I might consider selling my house,†he says.
With a total investment of more than T$400bn ($12.2bn, €9.3bn, £6.2bn), the Taiwan High Speed Rail is the world’s largest build-operate-transfer project – in which private investors construct infrastructure and operate it for some time before turning it over to the government.
After seven years of construction and many delays, the High Speed Rail will transform western Taiwan – the non-mountainous corridor where more than 95 per cent of the island’s population and all its industry is located – into a single urban area. The rail link will reduce the travel time between Taipei and Kaoh*siung to 90 minutes from the current four hours.
When the project was conceived, the government imagined it could link Taipei, the island’s services hub, to the traditional manufacturing base in the south. However, in the 17 years that have passed since those first plans were drawn up, the island’s economy has changed dramatically.
“When the original bids were being made for the project, central and southern Taiwan were still humming manufacturing centres,†said Macquarie Securities in a recent research report. “However, domestic air travel between cities such as Taipei and Kaohsiung has been declining, which we believe is partly due to a fall-off in manufacturing activity in southern Taiwan as competition from China increased.â€
Taiwan’s labour-intensive industries used to have their headquarters in Taipei and factories in the south, and the High Speed Rail was conceived as fulfilling the demand for frequent travel between the two. But over the past 15 years most manufacturing operations have been relocated to China, and the impact of the new bullet train is set to differ from original expectations.
Huang Chung-che, a researcher at the Taiwan Institute for Economic Research (Tier), says without prudent planning, the new rail link could exacerbate the polarisation between Taiwan’s affluent north and the poorer south.
“For foreigners, Taiwan becomes ‘Taiwan city’, a *living circle that can be explored within a day,†he adds. “To locals, the boundaries between urban and rural areas will become even more blurred, the cities will suck in even more people and money from the *countryside.â€
However, the new rail link is expected to help boost local tourism. “We see the potential opening of Taiwan tourism to mainland Chinese as the major growth driver for the sector, but the addition of the high-speed rail system should provide a supporting role,†the Macquarie report says.
Among the benefits people are most eagerly awaiting from the rail link is relief from notoriously jammed freeways, according to Tier opinion polls. Almost 2m people a day travel along Taiwan’s western corridor, in addition to shorter trips on local train routes or roads other than freeways.
The new bullet train’s fares are 57 per cent below air fares but 50 per cent above the price for a traditional rail ticket. Judging from the experience with Korea’s High Speed Rail, Macquarie estimates that Taipei-Kaohsiung air services will lose two-thirds of their customers to the new rail link, forcing domestic airlines to cut flights and refocus on regional services.
Up to 30 per cent of traditional rail passengers between Taipei and Kaohsiung might also opt for the faster service, bringing the unprofitable state-owned Taiwan Railway more losses.
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Dont know if this is interesting to anyone else, but I lived in Taiwan for a couple years in my younger days and still follow what is going on there a bit.
Bullet trains set to bring Taiwan mixed blessings
By Kathrin Hille in Taipei
Published: January 3 2007 00:00 | Last updated: January 3 2007 00:00
Business may be slow for Hung Kuo-yu, who runs a small grocery shop on the outskirts of Zuoying, a grubby suburb of Taiwan’s second-largest city Kaohsiung, but when he leans from his doorway and looks down the deserted street he sees a reason for optimism.
At the end of the road, towering over shacks of sheet-iron and 30-year-old three-storey shops, is a gleaming airport-like structure.
Zuoying is the southernmost stop on the Taiwan High Speed Rail that will connect the capital, Taipei, to Kaohsiung, the southern port city that is home to the island’s largest naval base and heavy industry.
On January 5 the rail link officially opens for business and 18 trains will arrive in Zuoying daily, giving Mr Hung good reason to believe that travellers will flood his quiet neighbourhood and bring him more business. “If things work out well and land prices rise, I might consider selling my house,†he says.
With a total investment of more than T$400bn ($12.2bn, €9.3bn, £6.2bn), the Taiwan High Speed Rail is the world’s largest build-operate-transfer project – in which private investors construct infrastructure and operate it for some time before turning it over to the government.
After seven years of construction and many delays, the High Speed Rail will transform western Taiwan – the non-mountainous corridor where more than 95 per cent of the island’s population and all its industry is located – into a single urban area. The rail link will reduce the travel time between Taipei and Kaoh*siung to 90 minutes from the current four hours.
When the project was conceived, the government imagined it could link Taipei, the island’s services hub, to the traditional manufacturing base in the south. However, in the 17 years that have passed since those first plans were drawn up, the island’s economy has changed dramatically.
“When the original bids were being made for the project, central and southern Taiwan were still humming manufacturing centres,†said Macquarie Securities in a recent research report. “However, domestic air travel between cities such as Taipei and Kaohsiung has been declining, which we believe is partly due to a fall-off in manufacturing activity in southern Taiwan as competition from China increased.â€
Taiwan’s labour-intensive industries used to have their headquarters in Taipei and factories in the south, and the High Speed Rail was conceived as fulfilling the demand for frequent travel between the two. But over the past 15 years most manufacturing operations have been relocated to China, and the impact of the new bullet train is set to differ from original expectations.
Huang Chung-che, a researcher at the Taiwan Institute for Economic Research (Tier), says without prudent planning, the new rail link could exacerbate the polarisation between Taiwan’s affluent north and the poorer south.
“For foreigners, Taiwan becomes ‘Taiwan city’, a *living circle that can be explored within a day,†he adds. “To locals, the boundaries between urban and rural areas will become even more blurred, the cities will suck in even more people and money from the *countryside.â€
However, the new rail link is expected to help boost local tourism. “We see the potential opening of Taiwan tourism to mainland Chinese as the major growth driver for the sector, but the addition of the high-speed rail system should provide a supporting role,†the Macquarie report says.
Among the benefits people are most eagerly awaiting from the rail link is relief from notoriously jammed freeways, according to Tier opinion polls. Almost 2m people a day travel along Taiwan’s western corridor, in addition to shorter trips on local train routes or roads other than freeways.
The new bullet train’s fares are 57 per cent below air fares but 50 per cent above the price for a traditional rail ticket. Judging from the experience with Korea’s High Speed Rail, Macquarie estimates that Taipei-Kaohsiung air services will lose two-thirds of their customers to the new rail link, forcing domestic airlines to cut flights and refocus on regional services.
Up to 30 per cent of traditional rail passengers between Taipei and Kaohsiung might also opt for the faster service, bringing the unprofitable state-owned Taiwan Railway more losses.
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Dont know if this is interesting to anyone else, but I lived in Taiwan for a couple years in my younger days and still follow what is going on there a bit.