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Department of Rapid Transit Systems

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Taipei City Government Creates Repayment of Self-redeeming Finance for MRT Construction- -The First Example of Domestic Track Construction

Following Taipei City’s successful debt reduction, the Department of Rapid Transit Systems (DORTS), Taipei City Government commenced repayment of self-redeeming finance for MRT construction which entails the repayment of NT$6.232 billion accumulated until late 2018. NT$2.665 billion will also be provided for 2019, and this is the first case of its kind established for domestic track construction.
As stipulated in the financial plan for the Taipei Metropolitan Area MRT systems follow-up network construction approved by Executive Yuan, self-redeeming finance shall be borrowed by the municipal government for each line for the specified construction periods. Up to now, there are a total of NT$52.262 billion of self-redeeming finance which has been accumulated for the 131.1 km currently in operation, and following the completion of construction and opening of each line for operations, it will be reimbursed through positive operational benefits. In order to increase the speed of repayment of self-redeeming finance borrowed by municipal governments, after taking office Mayor Ko Wen-je actively supervised and coordinated with DORTS, the Department of Finance, the Department of Budget, Accounting and Statistics, and Taipei Rapid Transit Corporation (TRTC) to ensure that the handling principles are established for reimbursement of self-redeeming finance. While ensuring sustainable management and employee rights protection at TRTC, TRTC through rent payment methods and DORTS through the positive benefits of land development paid back the self-redeeming finance. 
Taipei City DORTS further explained that from 2017 to 2019 DORTS’ land development funds and TRTC’s rent payments have been arranged in succession for the budgeted repayment of self-redeeming finance. Of the total amount of the finance (NT$8.897 billion), NT$1.6 billion of land development funds were provisioned in 2017, NT$3.5 billion were provisioned in 2018, and NT$1.2 billion were provisioned for 2019 for a total of NT$6.3 billion, while NT$1.132 billion of TRTC’s rent payments were provisioned in 2018, NT$1.465 billion were provisioned in 2019 for a total of NT$2.597 billion. In accordance with financial plan, self-redeeming finance for each line must be repaid within 30 years after the line begins operations; therefore, payment was required to commence in 2013 (there was no self-redeeming finance for the initial network). DORTS is confident that repayment can proceed in the shortest time possible, especially with the MRT ticket fare having not yet been adjusted from the time operations began in 1996. In addition, besides being provided for the sustained operations of Taipei MRT, the nearly NT$40 billion in accumulated replacement funds will be sufficient to fulfill financial responsibilities and will be invaluable. Furthermore, this will be the first example of track construction for domestic public works.