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Taiwan High Speed Rail was an even better example of an essentially successful system producing a financial disaster due to the BOT project structure. While it achieved virtual monopoly along Taiwan's west coast (eliminating airline links altogether and suppressing conventional rail and highway buses) and boosted urban rail development in the cities served, operator THSRC left the tunnel financially only after some debt restructuring and a change in the depreciation model (turning a profit since 2011).

Last autumn, however, management implemented a classic example of bad fare policy: citing rising energy costs, fares were raised 7–10%, only achieving public outrage and – compared to the prior months' growth trend – a similar drop in ridership (which previously almost reached the original forecast of 140,000 a day). This led to the replacement of the CEO, and now there is talk of righting the again worsening financial situation by capital reduction (to reduce debt and thus the interest load) and extending the concession period (to reduce the depreciation rate).

Source: THSRC's statistics

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sat Apr 19th, 2014 at 02:47:14 PM EST

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