The Taiwan Railways Administration (TRA) aims to diversify into other businesses after corporatization next year to stem an escalating NT$4.4 billion (US$135.69 million) debt crisis, Director-General Tu Wei (杜微) said.
After a fact-finding trip to Japanese railroad companies in July, Taiwan should learn from operators such as Kintetsu Group Holdings Co, Ltd and Seibu Holdings Inc to diversify service types to generate “substantial profits,” Tu said In a report dated Oct. 6
Citing Kintetsu, Tu said that the company operates tour buses, car rentals, travel agencies and lodging services in addition to its railway operations — to create “a well-rounded structure for better mutual support.”
Photo: Taipei Times
In light of this, the TRA should expand its scale of affiliated businesses, from mostly meal box catering to train carriage and station cleaning, Tu added.
If the TRA could establish a subsidiary providing such services, it could pay itself NT$1.1 billion per year, Tu said, who did not clarify how much profit this would generate.
Similar strategies could apply to train maintenance and more, to reduce human resource outsourcing and “create competitiveness,” Tu said.
The TRA should also improve overseas marketing to attract foreign passengers, Tu said, without detailing how such improvements would be made.
The TRA is set to bear increased financial burdens from pay raises, welfare funds and asset depreciation after it officially becomes a company in January next year, according to the TRA’s budget for next year that it submitted to the legislature last month.
According to the budget, the TRA’s debts are to climb to NT$7.492 billion, or an increase of more than 60 percent from this fiscal year.
The looming crisis has apparently worried TRA employees, as Minister of Transportation and Communications Wang Kwo-tsai (王國材) last month told with lawmakers that an estimated 2,000 to 3,000 individuals, or 15 percent of its current workforce, might choose an early retirement to receive a maximum severance of seven months’ salary.
Last year, the TRA distributed a universal NT$2,000 allowance to all employees in an attempt to retain them, which was criticized as unrealistic.
The TRA has so far accumulated NT$4.4 billion in debt, and has faced intensifying public calls for its privatization, particularly after two large train accidents in 2018 and 2021, when nearly 70 passengers were killed.
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