Revitalizing state-owned land and idle public facilities

  • Date: 2017-01-10

I. Background

State-owned land is an important resource that belongs to the people, and in a dynamic economic environment, society expects something more than static, passive land management. The government is therefore promoting the revitalization of state-owned land and idle public facilities to make full and efficient use of these national resources.

Revitalization and appropriate development improve land-use efficiency, create asset value, boost state finances, and generate revenues that can be shared with all citizens. Facilities that have been left idle by changes in the broader environment should also be actively managed and put to good use to reduce the waste of national resources.

 

II. Revitalize state-owned land, create asset benefits

As of December 31, 2015 the government owned 2.187 million hectares of public-use land, 218,000 million hectares of land for non-public use, and 105,000 hectares of unregistered land for a total of 2.51 million hectares (accounting for 69.7 percent of Taiwan’s total land area of 3.6 million hectares).

A. State-owned land for public use

1. Increase utilization of state-owned real estate:

The Ministry of Finance (MOF) is guiding government agencies to utilize more of the state-owned real estate under their management to generate additional revenues.

2. Transfer management of land for public use:

After evaluating alternate uses for larger pieces of state-owned construction land, the MOF has selected 100 idle or underutilized land used for construction managed by government agencies, and transferred management of those properties to the National Property Administration (NPA). Fifteen such plots, approximately five hectares each, have already been re-designated as non-public use properties. The NPA will revitalize such plots by creating superificies on them to be auctioned off, offering them for rent through public tender, or using them for urban renewal projects.

3. Introduce private funding for public infrastructure projects:

The Act for Promotion of Private Participation in Infrastructure Projects provides for several types of public-private partnership projects that increase the value of state-owned land.

For a build-operate-transfer (BOT) project, a private institution invests in the construction of new infrastructure and then operates it for a specified period of time. When the operation period expires, ownership of the infrastructure is transferred to the government.

For a build-transfer-operate (BTO) project, a private institution invests in new infrastructure construction. When the construction is completed the government acquires ownership of the completed infrastructure from the private institution either without compensation, or by paying construction expenses to the private institution as a lump sum or on an installment basis. The private institution then operates the infrastructure for a specified period, after which operating rights revert to the government.

For a rehabilitate-operate-transfer (ROT) project, a private institution invests in the expansion, reconstruction or repair of existing infrastructure, and operates that infrastructure for a specified period. When the operation period expires, operating rights revert to the government.

For an operate-transfer (OT) project, a private institution operates an infrastructure project that was constructed using government investment funds. When the operation period expires, operating rights revert to the government.

4. Generate legal revenue:

Effective utilization of state-owned property pursuant to laws and regulations, including the proviso in Article 28 of the National Property Act, generated NT$41.5 billion (US$1.3 billion) in revenues in 2015 and NT$20.3 billion (US$626.5 million) in revenues during the first half of 2016.

5. Build offices for central government agencies:

As of December 2016, a total of 73 premises and 24 plots of state-owned land were allocated to central government agencies to build office facilities.

B. State-owned land for non-public use

1. This type of land includes state-owned land used for national security purposes, national parks, land used for infrastructure and construction, and land used for agriculture, forestry, animal husbandry and fisheries.

2. Regeneration strategies include promoting development by selling small plots and retaining larger ones, providing developers with land in exchange for the construction of buildings, and promoting long-term development and short-term utilization:

(1) The policy that prevents the sale of plots of land measuring 1,650 square meters or more has been retained.

(2) State-owned land will be used to support the Executive Yuan’s five major social stability programs and five innovative industries program. As of the end of 2016, the MOF helped local governments appropriate 20 plots (18.82 hectares total) of state-owned land and two state-owned premises (including 34 structures) to construct social housing units. The MOF also engages and cooperates with the competent authorities of different industries to improve land utilization and provide land required for the long-term care industry, cultural innovation businesses, startup clusters and solar energy installations. Other measures for increasing land utilization include participating in urban renewal projects, auctioning rights of superficies, releasing land rights, and cooperating with the private sector on development projects.

3. Examples of effective asset utilization include the Taiwan Provincial Government releasing usage rights on its old dormitory by renting them out as office space to young entrepreneurs. The facility boasted 100 percent occupancy on opening day December 5, 2015 and generates annual rental income of NT$1.38 million (US$41,800).

Taiwan’s largest outlet mall was constructed with private financing and expertise on a 6.7-hectare site owned by the state and New Taipei City. The 50-year right of superficies on the land, won by Japanese developer Mitsui Fudosan Co., generated development royalty of NT$500 million (US$15.8 million) and brings in NT$56.7 million (US$1.8 million) in rent and operation royalties each year.

 

III. Increase utilization of idle school grounds and fishing ports

The state currently owns 124 idle facilities (42 managed by central government agencies and 82 by local governments), including markets, fishing harbors, parking lots and school buildings. Changes and developments in the broader environment were the top reasons (in 61 cases) these facilities were left idle. The government will keep more sites from becoming idle, accelerate revitalization efforts, integrate resources, and take the following measures to increase utilization:

A. Use a revitalization platform to guide the managing government agencies to match idle resources to market needs and transform underused facilities.

B. Provide specific rewards and incentives to encourage proposals from local governments and private groups.

C. Systematically plan the use of underutilized or idle facilities nationwide:

Idle spaces may also be used to support other major government policies such as long-term care and public childhood education and care. As an example, the government is taking a comprehensive inventory of underutilized elementary and junior high school campuses and making those spaces available for elder care, child care and regular education for school-aged children.

To increase utilization of Taiwan’s fishing ports, the government is also considering releasing resources or consolidating resources in conjunction with coastal tourism industries, which will transform and reuse those ports while injecting new life into the local economy. Other large facilities that are underutilized or that require high annual maintenance expenses may be demolished, made into parks, or used more effectively in an overarching land utilization plan.

 

IV. Conclusion

State-owned land belongs to all citizens. Effective utilization and appropriate development of these assets will ensure environmental sustainability and fiscal stability while promoting economic and job growth. Idle or underutilized public facilities are a waste of national resources, and must be actively managed in conjunction with local governments and the private sector. Repurposing these old facilities will make full and effective use of the nation’s resources while spurring regional redevelopment.