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2009/FMM/012
Session: Plenary 2
Chinese Taipei’s View in Facilitating Finance for
Sustain Growth issue
Purpose: Information
Submitted by: Chinese Taipei
16th Finance Ministers’ Meeting
Singapore
12 November 2009
The Chinese Taipei’s view in Facilitating Finance for Sustain Growth issue
November, 2009
Governments have long played a key role in building infrastructure in the past. At the time when the
public resources are limited, promotion of private participation in such projects will not only serve to aid
in solving the funding problem, but also enhance efficiency, creativity and innovation in public spending
programs.
Chinese Taipei has devoted attention to matching the supply and demand for public infrastructure
financing. We have established a ‘Public Construction Commission (PCC)’ at the cabinet level to
implement the ‘Law for Promotion of Private Participation in Infrastructure Projects (PPP)’, and
provided various training opportunities in order to create a human-based, high-quality, and sustainable
environment for the development of national infrastructure for the new century. We have successfully
implemented many infrastructure projects including the Taoyuan Aerotropolis, inviting private
investment of US$480 million, the Taipei Medical University － Shuang Ho Hospital project with
US$13.2 million in private capital, the Taichung Urban Development Program with US$17 million in
private capital, and the Kaohsiung City Stadium Project with US$15 million in private capital, etc.
In 2009, the PCC will focus on increasing the capacity and efficiency in public work, with an estimated
scale of approximately US$16 billion. We have significantly enhanced the quality and performance of
public construction work by reinforcing the service and guidance functions, integrating the work of
different government units involved in PPP projects, and bringing in the thinking and vitality of the
private and corporate sectors,.
We have also adopted a number of measures designed to stabilize financial markets and ensure the
smooth running of the economy. For example, we have sought to strengthen the regulations governing
capital adequacy and financial soundness, and have taken steps to strengthen corporate governance,
internal controls, and internal audit systems. These measures will serve to further improve the
efficiency of private participation in public work projects.
We have recently come up with strategies to upgrade our economic development in the areas of six
key emerging industries: tourism, medicine and health care, biotechnology, green energy, culture and
creation, and high-end agriculture. These new growth industries will bring numerous investment and
job opportunities. To further increase our competitiveness in related industries, strengthen incentives
and establish international links, Chinese Taipei will implement plans to attain 6 main targets including
64 sub-projects totaling US$1.4 billion in infrastructure spending from FY 2009 to 2012. Those
sub-projects will include the Taipei MRT line extension, grade separation of railways, rebuilding of old
bridges, remediation of land subsidence, construction of sewers, the Taoyuan Airport MRT Project, and
national ICT infrastructure, etc. We would be happy to share experience in best practices and expertise
with other member economies and the private sector.
Here we provide an introduction to Chinese Taipei’s Private Participation in Infrastructure Project,
please see the Annex.
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Annex
Private Participation in Infrastructure Projects
in Chinese Taipei

Legal Basis
Underlying Principles
The Act for Promotion of Private Participation in Infrastructure Projects, which was promulgated on
Feb. 9, 2000, espouses the spirit of vigorous innovation and, from the aspect of creating benefit,
establishes partnership relations between the government and the private sector. The main features of
this Act include the following:
1. Embodiment of general-type legislation: The Act applies alike to all types of industries,
sectors, and development plans; it maintains flexibility of articles, and expands the delegation
of administrative authority to the government officials implementing the projects.
2. Embodiment of the civil contract concept: The Act adopts the principle of civil contracts under
which rights and obligations between the public and private sector shall be stipulated in the
concession agreement to reflect the partnership spirit of equal cooperation and create
"win-win" investment conditions.
3. Maximization of private participation: Not only is the scope of infrastructure development in
which private participation is permitted extremely broad and the methods of participation
diverse, but private entities may also carry out their own planning of proposals for participation
in infrastructure projects; this allows the private sector to discover investment opportunities,
and to give full rein to its creativity in planning investment projects.
4. Maximization of public sector’s carefulness: In the interest of completeness, feasibility studies
and preliminary planning should be conducted for all infrastructure projects which the public
sector plans for private participation; from the viewpoint of private sector, the feasibility of
private investment should be evaluated carefully and, in consideration of the special
characteristics of the infrastructure project, commercial incentives should be incorporated in
the formulation of the preliminary plan.
Scope of Infrastructure Projects
1. Transportation facilities
2. Common conduit
3. Environmental pollution prevention facilities
4. Sewage lines
5. Water supply facilities
6. Hydraulic facilities
7. Sanitation and medical facilities
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8. Social welfare facilities
9. Labor welfare facilities
10. Cultural and educational facilities
11. Major facilities for tour-site
12. Power facilities
13. Public gas and fuel supply facilities
14. Sport facilities
15. Parks facilities
16. Major industrial facilities
17. Major commercial facilities
18. Major hi-tech facilities
19. Development of new town
20. Agricultural facilities
Models of Private Participation
1. The private institution invests in the building and operation of the infrastructure project, and
upon expiration of the operation period, transfers the ownership to such infrastructure project
to the public sector. (Build-Operate-Transfer, or BOT model.)
2. The private institution invests in the building of the infrastructure project and upon completion
of the building, relinquishes the ownership to the public sector without compensation. The
public sector then commissions the operation of the infrastructure project in question to the
same private institution. Upon expiration of the operation period, the right to operate reverts
back to the public sector. (Build-Transfer-Operate, or BTO model.)
3. The private institution invests in the building of the infrastructure project and upon completion
of the building, the public sector acquires the ownership through the payment of the
construction expenses, either by a lump sum payment or by installment payments. The public
sector then commissions the operation of the infrastructure project in question to the same
private institution. Upon expiration of the operation period, the right to operate reverts back to
the public sector. (Build-Transfer-Operate, or BTO model.)
4. The public sector commissions the private institution, or the private institution leases from the
public sector, existing facilities for operation after making renovations or expansions. Upon
expiration of the operation period, the right to operate reverts back to the public sector.
(Rehabilitate-Operate-Transfer, or ROT model.)
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5. The public sector invests in the building of the infrastructure project and then commissions the
operation thereof to the private institution. Upon expiration of the operation period, the right to
operate reverts back to the public sector. (Operate-transfer, or OT model.)
6. To support the national policy, the private institution invests in the building of the infrastructure
project and owns the ownership thereto upon completion of the building, and then either
operates the facility by itself or commissions a third party for operation. (Build-Own-Operate,
or BOO model.)
7. .Any other model as may be approved by the competent authority.
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