in Taiwan: Policies and Opportunities€¦ · in Taiwan: Policies and Opportunities ... TRA comprehensive purchase and replacement of rolling stock (2001-2014) ... To raise benefits

Infrastructure Investment and “Cross-Field Value-Added Public Construction”

in Taiwan: Policies and Opportunities

Fei-Yu Kuo Acting Director General

Development of Urban and Housing Development Council for Economic Planning and Development

Executive Yuan

May 7, 2013

Outline 2

1

Investments of Major Infrastructures 2

3

Concluding Remarks 4

3

3 Bolstering National Infrastructure, Strengthening Competitiveness

Taiwan’s new competitiveness platform

Cross-strait

peace

Global markets

• Free Economic Zones (1) Free movement of goods, people, money, information and knowledge (2) Promoting high value-added economic activities

intelligent logistics, international medical care, value-added agri-products, international industrial cooperation

• Innovation and R&D Center • High value-added manufacturing center

Deregulation

and tax reform Investment Infrastructure

Clean and efficient

governments

The Direction of Government Policies

Expanding spending of public works and speeding up implementation of the i-Taiwan 12 Projects

i-Taiwan 12 Projects Major National Infrastructure Investments

4

i-Taiwan 12 Projects

Investments of Major Infrastructures

Transportation Network（1548.2 Bil）

- A Fast and Convenient Transportation

Network, NT$1,215.7Bil.

- Kaohsiung Port-City Regeneration

- Taoyuan International Airport City

Industrial Innovation（1245.7 Bil）

- Central Region New High-tech Industrial

Clusters Program

- Intelligent Taiwan

- Industrial Innovation Corridors

Urban and Rural Development（666.6 Bil）

- Urban and Industrial Park Regeneration

- Farm Village Regeneration

Environmental Protection（535.1 Bil）

- Coastal Regeneration

- Green Forestation

- Flood Prevention and Water Management

- Sewer Construction

Transport projects account for 48% of the government’s total public works spending, with rail projects accounting for 18% (2012).

Rail project investment is growing significantly.

5

100Million

5


Investment in Rail Construction will continue to grow

5

交通 48%

水利 7%

工商 5%

能源 0%

文教 10%

環境 5%

衛福 2%

都市 6%

農業 17%

Hydro. & Flood

Control 7%

Industry 5%

Energy 0%

Education 10%

Environment 5%

Social Welfare 2% Agriculture 17%

Urban & Housing

6%

Transportation 48%

農業建設

17%

公路

15%

軌道運輸

18%

住宅 0%

下水道 0%

都市開發 5%

航空 0%港埠 1%

通信資訊 4%

觀光 8%

水資源 4%

防洪 4%

工商 3%

油氣 0%

電力 0%教育 2%

文化 5%

體育 2% 垃圾 3%污染 2%國家公園2% 衛生醫療 1%

社會福利 1%

Tourism 8%

Telecom. 4%

Harbor 1% Aviation 0%

Railway

18%

Road

15%

Urban Dev.

5%

Sewage 0%

Housing 0%

Agriculture

17%

Social Welfare 1%

Heal Care 1% Nat. Park 2%

Pollution Pre. 2%

Waste Treat 3% Athlete 2%

Culture 5%

Education 2% Gas 0%

Electric Power 0%

Industry 3%

Flood Conl. 4%

Water Resource

4%

Climate change and energy efficiency and saving

high population density and urbanization

Rail transport offers relatively high comparative advantage, and is a suitable form of mass transport for a transport-oriented development (TOD) model.

6

232

339

480

318 13

644

0

100

200

300

400

500

600

700

德國日本韓國美國俄羅斯中國臺灣

人/Km2

Germany and Japan boast top-drawer railway systems, with emphasis on raising service quality

The highest population density, yet with high

development potential

The USA is doing all it can to catch up

China and Russia are speeding up rail construction

6


Relatively High Development Potential of Rail Transport

People/KM²

Germany China Russia Taiwan USA Korean Japan

7

7


Germany vs. Taiwan

Public transportation usage rate: 30%

Railway density: 0.09km/km2

Public transportation usage rate: 14%

Railway density: 0.03km/km2

Germany Taiwan

There is still room for improvement for Taiwan to upgrade standards of services both in public transportation and railway density.

Fast and convenient rail transport

Intercity

HSR

TRA railway system

Around-the-island railway system

Metropolitan

TRA transitization

MRT systems

Light rail and BRT

Building a Green, Fast and Convenient Transport Network 8


High Speed Rail

TRA railway

MRT

Planning line

Bus

台中

Major Rail Construction Investment Plans

Type of project Name of project Period of

construction Total budget (NT Billion)

Metropolitan MRT systems in north, middle and south of Taiwan

Taipei MRT Xinzhuang-Luzhou Line 1998～2014 167.7

Taipei MRT Xinyi Line 2005～2014 33.9

Taipei MRT Songshan Line 2006～2013 49.9

Tucheng Line extension to Dingpu 2007～2013 7.6

Taipei MRT Circle Line Phase 1 2008～2015 40.1

Taipei MRT Xinyi Line eastward extension 2009～2017 12.5

Taipei MRT Wanda-Zhonghe-Shulin Line 2009～2017 45.7

Taoyuan Airport MRT Line 2004～2015 113.9

Taichung MRT Wuri-Wenxin-Beitun Line 2005～2016 51.4

Kaohsiung MRT Red and Orange Lines 1990～2017 184.0

Kaohsiung Light Rail 2009～2020 16.5

Elevation and transitization of urban railways

TRA metropolitan area transitization and regional railway follow-up projects (Keelung-Miaoli section)

2005～2013 8.5

TRA metropolitan area transitization Taoyuan section elevation 2009～2017 30.8

Taichung metropolitan area railway elevation and transitization 2006～2017 37.2

Yuanlin urban railway elevation 2006～2016 5.9

Kaohsiung downtown railway undergrounding 2006～2017 71.6

Kaohsiung downtown railway undergrounding extension to Zuoying 2009～2016 10.7

TRA Kaohsiung-Pingtung Chaozhou transitization 2005～2015 24.6

Tainan downtown railway undergrounding 2009～2017 29.4

TRA comprehensive purchase and replacement of rolling stock (2001-2014) 2009～2013 36.0

Electrification and double-tracking of Eastern railway line

Hualien-Taitung line bottleneck section double-tracking and whole line electrification

2008～2015 25.4

Hualien-Taitung overall service efficiency raising 2009～2014 6.1

Total 1009.4

9


Government budget demand for infrastructure

I-Taiwan 12 Projects NT$2.7 trillion and NT$350 billion per year

The MRT projects of Taipei metropolitan in the future NT$ 682 billion

Government budget for infrastructure

NT$200 billion annually for major public works on average

10

With the limited government budget, the major challenges are

To integrate public work projects

To raise benefits and self-liquidation ratios (SLRs)

To generate private investment in public infrastructure

“Cross-Field Value-Added Public Construction”

New financing mechanism for

infrastructure investment is

highly needed

Challenges of Government Funding for Public Works

The Mechanism of “Cross-Field Value-Added Public Construction”

Approved by the Executive Yuan in 2012

Applied to all new public construction projects

11


“Cross-Field”

Cross sectors, such as

transportation and land development

transportation and tourism

flooding control and tourism

Cross regions

project areas and surrounding areas

Central and local partnership

Private and public partnership

The Financing Mechanism of “Cross-Field Value-Added Public Construction”

To internalize external benefits

To consider both efficiency and equity

To raise new funding sources into public construction

To expand the scale of public construction

12


Financial integration

Projects integration

Cooperative partnership

Timeframe integration

Sectors integration

To achieve five goals

Financial integration

Projects’ integration

Timeframe integration

Sectors’ integration

Partnership of the central and local governments

Delimiting the beneficial boundary of one specific project

Increasing properties’ value through reviewing land use plan

Diverting some revenues from properties into the project’s fund

Setting up finance- sharing Plan with local authorities

Fund financing for initial need

Financial risk estimation and rolling review

13


The Procedure of Project Integration

Define the impact areas

Evaluate and maximize external benefits

Internalize external benefits

Allocation of the benefit and cost

Funding the project

Risk management


‧Comprehensively planning one specific public work with designated nearby areas

Beneficial boundary

‧Type I: Areas within a certain walking distance of a station (e.g., within 500 meters or 1 kilometer from one station).

‧Type II: Linear areas extending from both sides of a public works project (e.g., within the first street block).

Areas in beneficial boundary

Public works







14



Increasing properties’ value through reviewing and revising land use plan

‧Review the land-use plan within the beneficial boundary

‧Raise the average FAR (floor area ratio)

‧Estimate tax revenue added

‧Promote joint development between public works and nearby land







15




‧Diverting the aforementioned revenue and external benefits back into the fund year by year to serve as part of the financial resources of the public work

‧The additional floor areas could be sold or reserved for public use

240% (Original Statutory

floor area)

Major public works

Sold totally or build affordable housing or student dormitories

Additional floor area 200%

Brought in Floor area bank

Sold (in part) Released to other areas

Co-construction with private land (in part)







16



‧Ministries set SLRs to serve as the important benchmark

‧Incentive mechanisms:

The higher the SLR,

the higher the prioritization for approval of the project

the higher the prioritization for budget allocation

the higher the ratio of central government subsidy for other parts of the project that are not self-liquidating

If the self-liquidation revenue is higher than expected, the amount of revenue allocated to the local government will be raised







17



(Investment first)

(Returns later)

‧ Set up a fund for each public work, with receipts and expenditures managed on an unified basis.

‧ The sources of the fund include financing, public budgets and fund revenues.

‧ Taking into account of individual project’s needs and the government’s fiscal condition, the funds will be flexibly used to support development.







18



‧ Risk management

the causes and responsibility should be analyzed

timely review of the project conducted

appropriate revisions should be made

adjustments should be made to support the payment







19



Budget 16.537 billion

Duration Completion in 2020

SLR 22.51% 39.64%

Kaohsiung Circular Light Rail Project 20

Project summary A 22.1 kilometer light rail line in Kaohsiung City, with 36 stations and 1 train depot, connecting with the existing Red and Orange Lines of the MRT and the TRA railway line, to create a rail transport network. MRT Red Line

MRT-Orange line

Light rail

TRA

HSR

Highway

HSR

airport

Industry park

Towntown


N

Budget NT 88.629 Billion

Duration Completion in 15 years from the date of comprehensive plan approved

SLR 2.96% 25.01%

A20

A7

A10

A21

A15G18

A8

A9

A11

A16

HSR Station(A17~A19)

Aeropark(A12～A14a)

桃園站

G7

G16

G17

G1

G13

G12

G10

G8

中正藝文特區

八德擴大

蘆竹行政園區

經國園區

都市更新

航空城

航空城產業園區

A20

A7

A10

A21

A15G18

A8

A9

A11

A16

HSR Station(A17~A19)

Aeropark(A12～A14a)

桃園站

G7

G16

G17

G1

G13

G12

G10

G8

中正藝文特區

八德擴大

蘆竹行政園區

經國園區

都市更新

航空城

航空城產業園區

Taoyuan MRT Green Line 21

Project Summary A 29.3 km line, with 20 stations and 2 depots (north and south), connecting the MRT Airport Line, Taoyuan Aerotropolis and Taoyuan Train Station, to form a medium-capacity MRT system.


Concluding Remarks 22

Concluding Remarks

Taiwan has been continuously investing in public construction and speeding up

implementation of the 12 i-Taiwan Projects since 2008, so as to bolster national

infrastructure and strengthen national competitiveness.

Taiwan will continue and speed up investments in railway construction to build a

green, fast and convenient transport network.

We will internalize benefits and expand private investment opportunities to

enhance infrastructure investment through the mechanism of “Cross-field Value-

added Public Construction”.

We sincerely welcome you to join us in investing in major infrastructure projects.

Documents

in Taiwan: Policies and Opportunities€¦ · in Taiwan: Policies and Opportunities ... TRA comprehensive purchase and replacement of rolling stock (2001-2014) ... To raise benefits