At 7 a.m. on January 5, 2007, over 500 passengers boarded train 102 at Kaohsiung's Tsuoying Station, and set off toward Panchiao in Taipei County for an 8:25 arrival. The 345-kilometer route, linking the two major metropolises of Taipei and Kaohsiung, may finally make the dream of day trips between the two a reality, changing western Taiwan forever.

Taiwan's biggest BOT

The Taiwanese government first investigated the possibility of a high-speed rail line along the western coast in 1987, and eventually settled on a publicly funded build-operate-transfer model, initially planning to use European InterCity Express technology before changing to the Japanese Shinkansen. In 1997 the Taiwan High Speed Rail Alliance, headed up by chair of Continental Engineering Corporation, Nita Ing, won contract negotiation priority for the line. Over the course of construction, five of the major original investors expressed unwillingness to increase their investment levels, leading to several conflicts. Eventually the government stepped in with additional funding in the form of a guaranteed subscription to THSRC's share issuance, which enabled the corporation to raise loans from a banking syndicate. Due to these and other problems, the opening date for the High Speed Rail (HSR) was repeatedly pushed back.

In late 2006 the first HSR operating tests were held, with a team of experts finding 33 problems through their inspection and setting a deadline for their improvement. Eventually, under guarantees from the Ministry of Transport and Communications, rights were granted for a period of trial operations, meaning that the NT$480 billion HSR could finally roll out, with the exclusion of the Taipei-Panchiao section, expected to open at the end of January.

During the week and a half of tests, crowds of people eager to ride the HSR gasped in amazement as they watched the trains fly past, but the Taiwan High Speed Rail Corporation (THSRC) still found no shortage of problems with software and service quality, including doubled-up ticket sales, delays, smoke coming from the cars, problems opening the car doors, and computer system crashes. All of this clearly demonstrated the problems with the training of staff and the setup of the systems being used by the HSR.

While technologically the HSR is in chaos, given time these problems are resolvable. The bigger issue is that all of the stations, barring Taipei, are situated in the outskirts of their respective cities, and the connecting transportation for most is still somewhat lacking. Additionally, once the rush to try out the hot new thing has cooled, the TSHRC still faces the challenge of ensuring passenger numbers are high enough for the company to break even.

No matter what happens, in future the HSR will be Taiwan's most competitive mode of transport. The challenges it presents are already manifesting themselves, with domestic airlines facing passenger reductions on the Taipei-Taichung and Taipei-Chiayi routes of up to 20%, the Taiwan Railway Administration down almost NT$5 million a day, and bus business down 10%. For these operators, working out how to find new market niches and share in the flow-on effects of the HSR is problem that needs to be confronted.

Transforming space

Both the government and the people of Taiwan hope that the HSR will improve quality of life and raise the island's industrial competitiveness, but the major task will be closing the gap between the different cities and towns along the coast.

Lee-in Chen, a researcher at the Chung-Hua Institution for Economic Research, says that if the airports in northern, central, and southern Taiwan don't want their facilities to go to waste, they need to rely on direct flights between China and Taiwan being established. This would mean that cities in western Taiwan would be an hour or two's flight from connecting with the major supply chain and consumer markets of the Asia-Pacific region, making them more competitive in attracting investment and talent to Taiwan from the region and the wider world. The ability to access all of Taiwan in only a day could make the island both an economic and personnel hub for its Asia-Pacific neighbors.

Chen goes on to say that the most pressing issue facing the Taiwanese government is the encouragement of a stronger network of transport connections to the HSR stations, increasing transportation interconnection, encouraging investment in new towns to be developed around the stations, and promoting the development of the major cities along the line. In essence, all the plans for the new high-speed rail era require close cooperation between central and local governments.

Additionally, will the concentration of financial power really spread out to the smaller towns thanks to the HSR, and bring some level of equality to the various areas? Or will the convenience of the HSR just draw even more money and people into the cities? Much of this depends on government plans in the coming years.

How will the age of the High Speed Rail change the face of Taiwan? The nation waits with bated breath.