What’s in the Infrastructure Program?

To fortify infrastructure, unlock economy growth potential, and to ramp up investment momentum, lawmakers in Taiwan passed a special bill for Forward-looking Infrastructure Program earlier this year, allocating a budget of NT$420 billion to develop infrastructure needed for the next thirty years. The executive branch of Taiwan government has recently announced the special budgets set aside for phase I of the program (September, 2017 to December, 2018) which cover major elements of the Program. Additionally, if the legislative branch strikes a consensus, there will be additional four-year budget to be injected into infrastructure development.

Inroads for International Contractors in the Program

Even before the Program, railway construction has always been one of the largest infrastructure projects in Taiwan. The ongoing projects include New Taipei City’s Sanxia-Yingge lane project, DanHai light rail project, and Ankeng light rail project. Hence, it is expected that the railway constructions will continue to be a core element of infrastructure development in Taiwan. Numerous international tenders can be expected for railway constructions. When Taiwan’s rail industry is ready to develop key components of railway construction, foreign suppliers will take the roles to provide technical assistance. For example, Taiwan Rolling Stock Company (TRSC) has engaged Voith Engineering Services to jointly develop a tram for the Danhai New Township in New Taipei City, from concept, design through the prototyping phase, to subsequent commissioning. Whether as a turnkey (i.e. E.P.C.) contractor or as a subcontractor, foreign suppliers will take part in the opportunities offered by railway construction.

Legal Risks

Foreign suppliers’ foremost concern is to evaluate the legal risks involved prior to taking part in Forward-looking Program. Since all bidding contracts are in the form of government procurement projects with the Taiwan government being the owner, the legal procedure, regulatory compliance, and dispute resolutions are distinct from private transactions. Whether as a contractor or as a subcontractor, foreign suppliers should be properly advised against the legal issues that may arise during the various stages of the project ranging from tenders, award of bid, contract drafting, performance of the contract, to dispute resolutions, and should take proper measures to evaluate and assess the risks involved prior to submitting its bid to participate in the Forward-looking Infrastructure Program.