This Case is about ECONOMY, FINANCIAL MANAGEMENT, GOVERNMENT, HUMAN RESOURCE MANAGEMENT, INTERNATIONAL BUSINESS, JOINT VENTURES

PUBLICATION DATE: October 05, 2010 PRODUCT #: HKS671-PDF-ENG

Taiwan's High-Speed Rail A Public-Private Partnership Hits a Speed Bump case solution

This case follows the development of Taiwan’s high speed railway from project beginning in the late 1980s until its fiscal difficulties in 2009 describing the planning attempts, ridership projections, fiscal strategies and cost-benefit analysis involved in the job, in addition to the contracting procedure for the job. This job was among the biggest infrastructure projects on the planet and among the biggest infrastructure projects ever constructed, using a “public-private partnership” (PPP) – a strategy for infrastructure development where the private sector would construct and manage a job for several decades and after that transfer possession to the authorities.

Yet, in the year 2009, after just two years of operation, Taiwan High Speed Rail Corporation (THSRC), the private association in charge of constructing and managing the high speed train system, was in serious financial problem due to low ridership and the global economic crisis. THSRC requested that an independent third party, as provided for in the occasion of a government takeover in the government’s initial contract with the firm sets damages. Readers are left with the issue of what the Minister of Transportation and Communications of Taiwan should do in response to the request of THSRC. The case can be used in course discussions on the direction of public-private ventures, government procurement/contracting, and on decision making. HKS Case Number 1910.0.

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