What are the sources of construction funds for the MRT system?
MRT system construction is a major public transport program that connects city centers and surrounding cities. Construction expenditure is based on financial planning which has been approved by the Executive Yuan. The central government and local government related to the areas that routes pass through share proportions of the costs in accordance with construction planning.
When the Metropolitan MRT was opened to the public for operations, in addition to transportation efficiency, there were external effects, such as increases in land use value and local tax revenues along the line routes, and planning was integrated for MRT construction and surrounding lands, financial affairs, and funding, and through transport oriented development (TOD) and tax increment financing (TIF) methods external benefit internalization was achieved. By including estimated benefit/cost ratios or self liquidity ratios (SLR), the MRT's construction financial performance is increased, the government's financial burden is reduced, and MRT construction projects are carried out smoothly.
MRT system design planning includes financial planning which is submitted for central review by the local authorities, and the proportions that the construction costs (not including land acquisition costs) are shared by central and local governments at all levels is set in accordance with the results of calculations using self liquidity ratios (SLR). All levels of government must submit SLR that meets SLR threshold values for review. The higher the planning SLR, the higher the central subsidies for non-SLR expenses with incentive effects and the principle of fairness. Costs associated with challenges in the construction of the initial and the subsequent MRT networks, such as huge investments, engineering difficulties, restricted opportunities for land development, and schedule problems, are financed by the government. The central government, Taipei City Government, and New Taipei City Government collectively participate in the funding, and at present there are no private investors. In accordance with "Mass Rapid Transit Act", the investors from the private sector shall self-finance the required funds to handle civil construction except in accordance with the other statutes which regulate the matter.