Taiwan’s Japan-made bullet trains end first year in red — but on track



Taiwan’s Japan-built high-speed trains have yet to become a cash-cow success, but neither are they the disaster critics had once predicted.

As Taiwan marked the first year of the rail system on Jan. 5, bittersweet pride surely ranks high among its founders.

The bitter sprouts from a fiscal shortfall as Taiwan High Speed Rail Corp. seeks to dramatically boost ridership from the current 43,000 passengers daily to at least the break-even point.

But the sweet is just as palpable as Taiwan’s first bullet trains, which traverse 345 km between Taipei and Kaohsiung at the island’s southern tip, run without a hitch.

“Before operations began, many media outlets reported the system would be very dangerous. . . . False reports still appear in the press,” said Takaomi Goto, chairman of the Taiwan Shinkansen Engineering Corp. “But . . . there haven’t been any big errors. In terms of safety, we have achieved reliability. . . . Everybody is saying that Taiwan’s high-speed rail network is successful.”

Taiwan High Speed Rail in 2000 contracted Taiwan Shinkansen Engineering, a consortium of seven Japanese firms, to provide and maintain the core technology for the bullet-train network.

The consortium’s contributions include a fleet of 30 700 Series bullet trains, which Goto said boast a 99.6 percent punctuality rate.

But that precision has come at great cost — literally and figuratively.

Over budget and 16 months behind schedule, the high-speed rail system opened for business amid intense, and often negative, media attention on Jan. 5, 2007.

Multiple minor derailments in test runs two months prior to the opening supplied ammunition to critics, who conjured up images of a nightmarish pileup at 300 kph, the trains’ top speed.

Mixing European track technology with Japanese bullet trains, they warned, was a recipe for derailment.

Originally, German bullet-train maker InterCityExpress was slated to provide the core technology.

But in 1998, an ICE train in Germany jumped the tracks at 200 kph, killing 101 passengers in the worst high-speed train accident ever. Investigators pointed to suspect wheel technology.

The crash ended ICE’s business in Taiwan and the island turned to Japan-based Taiwan Shinkansen Engineering for “earthquake-proof” bullet trains, but the Western technology-oriented THSR still insisted on European-style tracks.

That decision led to a troubled collaboration with Taiwan Shinkansen Engineering to forge the world’s first Japanese-European bullet-train system in the world’s biggest build-operate-transfer project ever. The final price tag was $15 billion.

As delays and cost overruns mounted, critics panned the project as a doomed, extravagant bid to integrate incompatible technologies.

But the detractors are falling silent as the system turns a corner in its first year.

Boasting an impeccable safety record so far, THSR plans to increase daily trips from 113 to 176 and post profits next year, THSR Chairwoman Nita Ing said.

Already, a new ticketing policy is boosting passenger traffic.

In November, THSR added open seating, while reducing fares by 20 percent, for seats in three train cars, a policy that saw passenger traffic jump from 1.44 million passengers in October to 2 million in December.

And so popular is the policy that THSR plans to extend it indefinitely, said Ted Chia, vice president of the THSR public affairs division.

“The trend is obvious,” he added. “Passengers are steadily increasing.”

Still, 2 million riders monthly is a far cry from what an industry insider said is the 3.6 million passengers, each paying at least 1,000 Taiwan dollars (¥3,350), that THSR needs to start settling its debts and making a profit.

Nonetheless, “THSR expects to break even in the latter half of this year,” Chia said, adding the network will run 176 daily trips by then.

So even though THSR is running deep in the red, its future could be bright.

This year’s goals, Chia said, include improving ticketing systems and inducing convenience stores to serve as ticket outlets.

Local personnel are meanwhile increasing as THSR internalizes its Eastern and Western technologies.

At the start of operations, nearly all train operators were foreign.

Now, of the current 89 train operators, 54 are Taiwanese and most of the remaining 35 are French, Chia said.

Another key goal this year, he added, is to employ 100 Taiwanese drivers as foreign drivers dwindle.

Long-term plans include developing about 92 hectares of land in five “business districts” near the line, a business opportunity for THSR as its bullet trains drive up real estate near stations, Chia said. THSR manages the land under government contract.

Next year, THSR plans to break ground on a 12-km extension to the Nangang District in Taipei with operations starting in 2011.

Construction of three more stations on the current line will follow, Chia said.

“Our biggest source of target customers now are private car owners,” he said. “Nearly 2 million private vehicle trips are made on Taiwan’s highways. If we could draw one-tenth, or even one-eighth, of that traffic, that would be phenomenal.”