Near-bankruptcy of the Taiwan High Speed Rail Corporation: What Went Wrong?

After a few delays, the Taiwan High Speed Rail (THSR), which is the largest current Build-Operate-Transfer (BOT) Railway Project in the world, with eight stations on the line connecting the metropolises of Taipei and Kaohsiung, began its passenger service in January 2007. However, by February 2009, it became very clear that the Taiwan area government must take over the THSR Corporation (THSRC) in one way or another, because the latter had already mired in enormous debts, loosing roughly two thirds of its capitalization. The THSR was only able to break even once in April 2008. This paper spells out the major reasons behind the project’s near-bankruptcy. Some questions will be posed: Who are involved? Who should be responsible for the failure? Should business entrepreneurs venture into High Speed Rail (HSR) projects in the future?