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Private Participation in Infrastructure Projects
Now and for the Future
  • Legal Basis
Underlying Principles
The Act for Promotion of Private Participation in Infrastructure Projects, which was promulgated on Feb. 9, 2000, espouses the spirit of vigorous innovation and, from the aspect of creating benefit, establishes partnership relations between the government and the private sector. The main features of this Act include the following:
 
  1. Embodiment of general-type legislation: The Act applies alike to all types of industries, sectors, and development plans; it maintains flexibility of articles, and expands the delegation of administrative authority to the government officials implementing the projects.
  2. Embodiment of the civil contract concept: The Act adopts the principle of civil contracts under which rights and obligations between the government and private sector shall be stipulated in the concession agreement to reflect the partnership spirit of equal cooperation and create "win-win" investment conditions.
  3. Maximization of private participation: Not only is the scope of infrastructure development in which private participation is permitted extremely broad and the methods of participation diverse, but private entities may also carry out their own planning of proposals for participation in infrastructure projects; this allows the private sector to discover investment opportunities, and to give full rein to its creativity in planning investment projects.
  4. Maximization of government carefulness: In the interest of completeness, feasibility studies and preliminary planning should be conducted for all infrastructure projects which the government plans for private participation; from the viewpoint of private sector, the feasibility of private investment should be evaluated carefully and, in consideration of the special characteristics of the infrastructure project, commercial incentives should be incorporated in the formulation of the preliminary plan.
Scope of Infrastructure Projects
  1. Transportation facilities
  2. Common conduit
  3. Environmental pollution prevention facilities
  4. Sewage lines
  5. Water supply facilities
  6. Hydraulic facilities
  7. Sanitation and medical facilities
  8. Social welfare facilities
  9. Labor welfare facilities
  10. Cultural and educational facilities
  11. Major facilities for tour-site
  12. Power facilities
  13. Public gas and fuel supply facilities
  14. Sport facilities
  15. Parks facilities
  16. Major industrial facilities
  17. Major commercial facilities
  18. Major hi-tech facilities
  19. Development of new town
  20. Agricultural facilities
Models of Private Participation
  1. The private institution invests in the building and operation of the infrastructure project, and upon expiration of the operation period, transfers the ownership to such infrastructure project to the government. (Build-Operate-Transfer, or BOT model.)
  2. The private institution invests in the building of the infrastructure project and upon completion of the building, relinquishes the ownership to the government without compensation. The government then commissions the operation of the infrastructure project in question to the same private institution. Upon expiration of the operation period, the right to operate reverts back to the government. (Build-Transfer-Operate, or BTO model.)
  3. The private institution invests in the building of the infrastructure project and upon completion of the building, the government acquires the ownership through the payment of the construction expenses, either by a lump sum payment or by installment payments. The government then commissions the operation of the infrastructure project in question to the same private institution. Upon expiration of the operation period, the right to operate reverts back to the government. (Build-Transfer-Operate, or BTO model.)
  4. The government commissions the private institution, or the private institution leases from the government, existing facilities for operation after making renovations or expansions. Upon expiration of the operation period, the right to operate reverts back to the government. (Rehabilitate-Operate-Transfer, or ROT model.)
  5. The government invests in the building of the infrastructure project and then commissions the operation thereof to the private institution. Upon expiration of the operation period, the right to operate reverts back to the government. (Operate-transfer, or OT model.)
  6. To support the national policy, the private institution invests in the building of the infrastructure project and owns the ownership thereto upon completion of the building, and then either operates the facility by itself or commissions a third party for operation. (Build-Own-Operate, or BOO model.)
  7. .Any other model as may be approved by the competent authority.
Application and Evaluation Procedures
  1. Government-planned projects
Government-planned projects process
  1. Unsolicited proposal – the proponent provides land for project utilization
Unsolicited proposal – the proponent provides land for project utilization  
  1. Unsolicited proposal – the government provides land and/or facilities
Unsolicited proposal – the government provides land and/or facilities
Note: Excluding time required for the private applicant to submit project documents in accordance with Article 46 of the Act, for solicitation of other private investors by the arranging authority, and for private investors to provide additional required documents.
 
  • Favorable Treatment
 
*"Major infrastructure projects" refers to those infrastructure projects which are important and with certain scale. The scope of the major infrastructure projects shall be determined by the competent authority in conjunction with the relevant authorities.
 
  • Government Promotion Mechanism
The Executive Yuan established the Committee for the Promotion of Private Participation in Infrastructure Projects at the end of 2002 in order to provide a cross-ministerial coordination mechanism for such projects. The Committee is headed by the premier and is composed of the heads of central-government ministries and commissions. An coordination task force was also set up, with the competent authority (the Public Construction Commission) handling staff operations, for the task of promoting private participation in infrastructure projects by central government ministries and local governments, and for intensified coordination in removing investment obstacles that require cross-ministerial cooperation. The ministries and commissions, as well as county and city governments, have also set up their own private participation promotion committees to oversee coordination and resolution of problems encountered in carrying out private participation projects within their jurisdictions.
 
Government Coordination and Promotion Mechanism
 
After years of vigorous implementation, large amounts of infrastructure construction that was once dominated by the government works budget has been released to private construction and operation. From just a few tens of millions of NT dollars in the beginning, the accumulated value of projects for private participation has reached more than NT$300 billion. In 2003 private investment amounted to NT$62.47 billion, an eight-fold increase over the NT$7.27 billion recorded the previous year. In addition to benefiting the government budget to the tune of hundreds of billions of NT dollars, this effort has also created over 20,000 jobs and has allowed the public to enjoy high-quality infrastructure facilities earlier than would have otherwise been possible. This is a win-win-win result, for the government, for private enterprises, and for society at large. nn nIncreased in Signed Private-Participation Infrastructure Projects
Transportation facilities and common conduit
  • -- Metropolitan mass rapid transit systems: Taipei MRT loop line, etc.
    -- Metropolitan light rail systems: Taipei, Xinyi District light rail system; Kaohsiung, harbor area light rail system; Tainan, light rail transportation system; etc.
    -- Intelligent transportation systems: Kaohsiung intelligent city, etc.
    -- Transportation and terminal facilities: Suao-Hualien highway, second-stage construction; Direct Taipei-Yilan railroad; Taiwan Railway, Nangang Station building; Miaoli railroad exhibition gallery; Taipei Railway Station, 2nd floor vendor area; etc.
    -- Parking lots: Banciao, Jhongsiao parking lot; Hsinchu City parking lot, new construction, etc.
    -- Freeway rest areas: Jhongli Rest Area, Hukou Rest Area, Guansi Rest Area, Taian Rest Area, Siluo Rest Area, Sinying Rest Area, Rende Rest Area, Guanmiao Rest Area, etc.
    -- Port facilities: Keelung Free Port, outer harbor construction; Port of Taipei, second cargo hub; Taichung Harbor, West Wharf No. 8 and rear-line construction; Kaohsiung Harbor, second logistics center at Third Container Terminal; Kaohsiung Harbor, water recreation and business area; Anping Harbor, hydrofoil terminal; etc.
Environmental pollution prevention facilities
  • -- Garbage incinerators: Incinerators in Nantou County, Hualien County, etc.
    -- Final landfill for general industrial waste: Landfills for Taoyuan County, Miaoli County, Keelung City, etc.
    -- Kitchen waste recycling plant:Recycling plants for Taoyuan County, Kaohsiung city, etc.
    -- Auto emissions testing stations: Encouragement of the private sector to propose auto emissions testing stations.
    -- Soil regulation centers: Dirt regulation centers for the Da-an Dirt Bank in Taichung County, etc.
Sewage channels, water supply, and water conservancy facilities
  • -- Sewage channels: Sewage channels for Danshuei, Ban-Sin (Sansia, Yingge, Puding), Taibao, Shihlong River (Dashe, Renwu), Luodong, Beigang, Taitung, Jiali, Neipu, Taichung, Changhua, Dounan, Gueiren, Magong, Yanshuei, Tainan, Gangshan, Ciaotou, Rueifang, Daliao, Yuli, Jhongli, Chiayi, Nantou, Puli, Caotun, Jhushan, Yongkang, Toufen, Fongyuan, Hemei, Lugang, etc.
    -- Water supply: Pingding water treatment plant, etc.
    -- Small Hydroelectric Plants: Small hydroelectric plant Mudan Reservoir, etc.
    -- Flatland reservoirs: Dahu in Yunlin, Dahu in Kaohsiung-Pingtung, Dahu in Tainan, etc.
    -- Seawater desalination plants: Desalination plants in Kinmen (2,000 tons), Matsu (2,000 tons), Penghu (10,000 tons), Hsinchu (30,000 tons), Taoyuan (120,000 tons), etc.
Sanitation and medical facilities
  • -- Outsourcing of operation of certain facilities: Taipei Hospital: Cooperation of Catheterization; Changhua Hospital: magnetic resonance imaging machines; Puzih Hospital: Hemodialysis room; Cishan Hospital: respiratory care ward; Fongyuan Hospital: breast magnetic resonance imaging equipment; Nantou Hospital: Gyroidal tomography equipment; Chenggong University Hospital: linear accelerator; Veterans General Hospital, Taipei: Palliative and Hospice services; Veterans General Hospital, Taichung: magnetic resonance imaging examination center; Veterans General Hospital, Kaohsiung: positron emission tomography center; Veterans General Hospital, Kaohsiung: chronic disease clinic and care center of the subtropical medicine center; Chenggong Branch, Taitung Hospital: nursing home; Beimen Branch, Sinying Hospital: nursing home; Chiayi Hospital: center of cosmetic medicine; Tainan Hospital: Living Square; etc.
Social and labor welfare facilities
  • -- Social welfare facilities: Senshu Nursing Center of the Malan Veterans Home, Renai Hall of the Pingtung Veterans Home; children's wing, nursing building of theTaipei County Senior Citizens Home of Compassion; Taoyuan County consolidated welfare service center for the mentally and physically disabled; Taoyuan County funeral parlor; Danhai New Town senior citizens' housing construction project; Kaohsiung New Town senior citizens' housing construction project; Pinglin senior citizens' healthy living park; etc.
    -- Labor welfare facilities: Skills rating hall of the Tainan Vocational Training Center, etc.
Cultural and educational facilities
  • -- School facilities: Swimming pools at Changhua Girls' Middle School, Taichung Girls' Middle School, Tainan Girls' Middle School, Wenhua Senior Middle School, Tainan Marine Vocational High School, Sanchong Commercial and Industrial School, Sindian Primary School, and National Taiwan University of Science and Technology; training hotel at Tainan Commercial High School; youth academic exchange center at National Taiwan University; innovation incubator at National Central University; innovation incubator at National Tsinghua University; etc.
    -- Social education facilities: National Museum of Prehistory, Sept. 21 Earthquake Education Park, National Museum of Marine Technology, Jhongshan Building at Yangmingshan, etc.
    -- Cultural facilities: Popular music centers in northern, central, and southern Taiwan; Taipei Art Center; Culture Park of the Hualshan Creative Park; New Greater Taipei Opera House; Taichung Opera House; Weiwuying Popular Arts Center; Taoyuan County Indigenous Peoples Cultural Hall; Nankan New Town Art Center; Taoyuan Hakka Culture Hall; Dasi Club House and Chiang Kai-shek House; etc.
Major facilities for tour-site
  • -- Northern Taiwan: Budget hotels in Taipei City, Beitou cable car, Lengshueikeng Recreation Area, Yangmingshan Guest House, Mt. Guanyin cable car, Lover's Lake Park, Fulong Beach Resort, Yeliou Geo-Park, Shihmen Reservoir Scenic Area, Syuejian Recreation Area in Shei-Pa National Park,etc.
    -- Central Taiwan: Lishan Guest House, Houli Horse Farm, Mt. Bagua Resort, international hotel at Sun Moon Lake, etc.
    -- Southern Taiwan: Chukou Camping Resort, Guanshan Green Garden Eco-Park and Kending Art Village in Kenting National Park, Hutoubei tourist hotel, Baolai resort hotel, Saijia Air Park, Liouciou Scenic Area, etc.
    -- Eastern Taiwan: Nanao Farm, Dongshan River Recreation Area, Liou Clubhouse and Visitor Center, Fonglin Resort, Sansiantai hotel area, Jinlun Hot-spring Area, Hongye Hot-spring Recreation Area, Chihshang Visitor Center, Liyu Lake Visitor Center, etc.
    -- Offshore islands: Yuwong Islet Resort, Jibei Resort Hotel and Recreation Area, Kinmen National Park Visitor Hall, etc.
    .
Power facilities and public gas and fuel supply facilities
  • -- Wind generators: Beimen Coastal Wind Power Project (3,500KW), etc.
    -- Hot-spring generators: Cingshuei Hot-spring Power Project, etc.
Sport facilities -- County and city sports facilities: Taipei County Sinjhuang Gymnasium swimming pool, Taoyuan County Multi-purpose Sports Park, Taoyuan County General-purpose Gymnasium, Tainan City Sports Center, Hsinchu County Sports Park, Yunlin County Baseball Stadium, Taichung City Baseball Stadium, etc.
Parks facilities-- County and city park and green area facilities: Chenggong Camp Water Park in Changhua County, Taichung Metropolitan Park, Kaohsiung Metropolitan Park, etc.
Major industrial, commercial, and hi-tech facilities
  • -- Retail markets: Jhonglun Market at Fongshan, Kaohsiung County; Shenaokeng Market in Keelung; etc.
    -- Industrial zones and science parks: Southern Taiwan Science Park, Far Eastern Digital Communications Park, etc.
    -- International exhibition hall and international conference center construction projects
New town development
  • -- Integrated new town development: Danhai New Town, Kaohsiung New Town, etc.

Agricultural facilities

-- Agriculture recreation facilities: Donghe Branch of Taitung Farm, Cilan Forest Recreation Area, Mingchih Forest Recreation Area, Alishan Forest Railroad and Forest Recreation Area, Aowanda Forest Recreation Area, Mt. Hehuan Forest Recreation Area, Guanwu Forest Recreation Area, Tengjhih Forest Recreation Area, Mt. Dongyan Forest Recreation Area, Mt. Dasyue Forest Recreation Area, Chihnan and Mt. Mugua cable cars, etc.
-- Agriculture promotion facilities: Changhua Flower Exposition Hall, Taipei Flower Market, Miaoli multi-function agriculture promotion and education facilities, etc.
-- Agriculture technology parks: Tainan Orchid Biotechnology Park, Yilan Marine Biotechnology Park, Chiayi County Herbal Medicines Biotechnology Park, etc.
-- Fishing harbor facilities: Anping Harbor live fish shipping hub, Jhuwei Fishing Harbor and Coastal Recreation Area, Houlong Coastal Recreation Area, Waipu Fishing Harbor in Miaoli County, Jiangjyun Harbor Holiday Fish Market, Dongshih Fishing Harbor, Wushih Fishing Harbor, Gulf Hotel at Penghu Third Fishing Harbor, Anping Harbor Live Fish marketing and transshipment area, Donggang Fishing Harbor direct sales center, etc.

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