Taipei City Government and Radium Life Tech Reach Agreement Regarding Major Dispute Over Existing Joint Development Projects
Taipei City Government and Radium Life Tech Co. Ltd., (Radium Life Tech) have reached an agreement regarding a major dispute over the Xindian Depot MeHAS project. The arbitration court on July 11, 2016 made a formal judgment that the equity share ratio will be increased from 30.75% to 45.4469% and ruled that Radium Life Tech should pay Taipei City Government NT$3,350,883,636. Radium Life Tech promised not to counter-sue to have the ruling revoked and paid the sum on July 25. In addition, due to the promotion of the Taipei East District Gateway Development Projects, after a comprehensive policy review, Nangang Depot is in a location that will be used for the future development of five major industrial centers and a planned location for public office use, which will meet Taipei City's and the public's greatest public interests. Taipei City Government on May 11, 2016 submitted a formal statement to Radium Life Tech stating that development project and investment contract were to be terminated.
In order to avoid repeating the mistakes from the MeHAS project, before Taipei City Government seeks out new collaborative relationships with the industry world, comprehensive inspections will be required of the existing joint development projects in collaboration with Radium Life Tech. Therefore, DORTS summarizes the major disputes, consultations, and the reaching of consensus for the following three joint development projects with Radium Life Tech: Xindian Depot, Muzha Station, and Nangang Depot as below:
1. Xindian Depot joint development project: each mall item will be returned to Taipei City Government. MRT co-constructed facilities and common facilities with the building will also be returned. Radium Life Tech promises to reimburse NT$329,483,532 as a returning condition for the current case.
2. Muzha Station joint development project: Taipei City Government will engage in civil litigation to recover excess interest from investors. Investors consent to paying Taipei City Government NT$25,141,044 in received losses for reconciliation notes content and promise to bear the burden for Taipei City Government's actual expenditures for court costs.
3. Nangang Depot joint development project: Taipei City Government in accordance with Administrative Procedure Act Section 146 regulation legally terminated the investment contract case, and after several rounds of negotiations with investors, in March 2016 claimed NT$7.03 billion in expected profits and on June 23 formally submitted documentation with a CPA report requiring that Taipei City Government makes payments of over NT$565 million based on documents in terms of the expenditures of preliminary construction and design. By this agreement, investors consented to arbitration settlements on the projects for the following amounts. They also agreed not to make any additional requests for investment contracts and consented for Taipei City Government to obtain the task and design results for the previously scheduled construction projects:
(1) Taipei City Government will refund NT$ 335,059,403 to investment partners for the co-constructed costs already paid on May 17, 2011.
(2) Taipei City Government will refund all of the bank joint guarantee paid by Radium Life Tech on December 20, 2006 (NT$ 245,375,880 performance bond).
(3) Taipei City Government will pay NT$244,140,771 to joint investors for already constructed facilities, development planning, and architectural design. Taipei City Government will cover these expenses within a reasonable time period and according to program provisions and payment-related regulations.
Total costs for construction and completed work items for the aforementioned Nangang Depot joint development project will be paid as reimbursement for use in subsequent development projects.
Taipei City Government and Radium Life Tech signed an agreement according to the above consensus on August 29, 2016. Radium Life Tech had already transferred NT$354,624,576 of the contractually-owed money by August 31, 2016, and Taipei City Government has safeguarded the municipal property interests. In the future, Taipei City Government will continue to uphold the core values of openness and transparency, based on the principles of openness, fairness, and reasonability, and maintain orderly and cooperative relationships for future joint development projects. Data related to this case is openly available on DORTS' website for public access. (Taipei City Department of Rapid Transit Systems Website: Main Page – Land Development Information – Equity Allocation Results for Land Development – Quarterly Protocol and Assessment Data).