So, possibly, with the world-wide recession, the land values didn't escalate fast enough to make the project profitable, however it was financed?Thee was one legitimate problem I read about elsewhere; the project was built where the land was cheap, which means the terminals are at the fringe of the cities rather than downtown. Revenues have been increasing as the cities have built out to meet the trains.
This is the same effect as the Yamanote line around Tokyo. Originally built to bypass the built up areas, the stations became the focus of considerable growth until the city surrounded the line.
This would indicate the government actually wants nationalize it rather than try to keep it in private hands. Which is all well and good. But wasn't it the same government that initially went along with the high level of debt? It was not like commercial banks said, oh yeah we love to take on that risk, without some goading from the government. At least that is how most of these things seem to work in Asia anyway. I doubt that Taiwan is any different.The latest news.
The line has developed and is now profitable, but it's overbuilt for the application and the debt level is too high without reorganizing the debt.
Since the government is against reorganizing the debt they might be forced to spend NT$700 billion ($22.5 billion) to buy the system after bankruptcy.
Politics at work.