Expediting public works programs to boost domestic economic growth

  • Date: 2017-02-21

I. Background

Investing in public works is one of the government’s most important policies, as these investments spur economic growth, improve domestic infrastructure and enhance the quality of life. To ensure the smooth implementation of public works programs, the Public Construction Commission (PCC) convenes an interministerial Public Construction Supervisory Task Force once a month to review major infrastructure projects, visit construction sites to help solve problems, and help government agencies operate more efficiently. A mechanism has also been created to track all licensing and permit procedures on new construction projects, which will speed up progress and further expand domestic demand while reinvigorating local industries.

 

II. Progress of public construction projects in 2016

A. In 2016 the government approved a budget of NT$328.876 billion (US$10.18 billion) for 198 projects under managerial oversight. By the end of the year, NT$311.411 billion (US$9.64 billion) or 94.69 percent of this budget was executed, which is higher than the 93.82 percent in 2015.

B. Progress of major public works programs in 2016:

1. Kaohsiung circular light-rail transit project:
The first phase of the project (to open stops C1 through C8) was completed in June, creating a quality transportation network for Kaohsiung and boosting local industries.

2. Hushan Reservoir (Yunlin County):
Construction on the main part of the reservoir was completed in July, providing Yunlin residents with clean drinking water while supplementing water supplies for Chiayi and Changhua counties.

3. Taichung Metropolitan Opera House:
Construction was completed this year and the opera house opened its doors to the public in September. 

4. Taichung railway elevation project:
Work to convert the ground-based Taichung railway line into an elevated system was completed on October 16 with the opening of the Fengyuan, Tanzi, Taiyuan, Taichung and Daqing elevated stations, marking an important milestone in Taichung transportation.

5. National Yang-Ming University Hospital (Yilan City):
The Lanyang Campus of National Yang-Ming University Hospital was inaugurated on October 27.

6. Linkou Thermal Power Plant retrofit project (New Taipei City):
Unit 1 of the power plant was connected to the electricity dispatch system in May (increasing the summer power reserve capacity by approximately 2 to 3 percent) and began commercial operations in November. Unit 2 began parallel power generation in August.

7. Pingtung Performing Arts Center:
After a soft opening on October 23, the center officially opened its doors in December, becoming the largest performance venue in Pingtung.

 

III. Guidance and monitoring: ensuring construction progress and quality

For major projects that fall behind schedule, the PCC takes guidance and control measures to help agencies work faster and more efficiently. In cases where the tender process has been nullified or aborted, or the contract suspended or terminated, the PCC will review the causes and find solutions to complete the tender or resume construction.

A. Assistance for major infrastructure projects:

The PCC conducts on-site walk-through inspections to help solve problems and remove obstacles for the responsible government agency.

1. Kinmen Bridge construction project:
After reissuing a bid on a “most advantageous tender” basis, Kinmen officials awarded the tender on November 28, 2016 and launched the construction project on December 28.

2. Tainan railway underground project:
For the railway’s C214 section (traversing parts of East District and Rende District), Tainan officials switched to the most advantageous tender approach and awarded the tender on December 27, 2016. Construction began January 10, 2017.

3. National Taiwan University Hospital branch at Hsinchu Biomedical Park:
After the PCC helped officials reevaluate their tender bid strategy, the contract was awarded to the most advantageous tender, and construction began February 2, 2017.

4. Kaohsiung railway underground project:
The PCC helped expedite the relocation of oil pipelines by state-owned fuel supplier CPC Corp., who then transferred use of the land on January 1, 2017 to allow crews to continue moving the railway underground.

5. Taichung metro system land-use issue:
With assistance from the PCC, Taichung officials in December 2016 obtained consent to use land owned by CPC for construction of the metro system.

6. Suao-Hualien Highway improvement project:
The PCC negotiated to speed up archaeological excavations of the Hanben Culture prehistoric relics that were discovered during road work. Land use permission was gradually transferred back to construction crews beginning December 2016.

7. Construction of the Danjiang Bridge and connecting roads (New Taipei City):
On December 20, 2016 the PCC coordinated efforts to resolve issues concerning the relocation of power lines by Taiwan Power Co. and other civil engineering problems.

8. Wei-Wu-Ying Center for the Arts: (Kaohsiung):
The PCC helped extend the center’s building permit and coordinated other issues. The center’s outdoor area was opened to the public on January 1, 2017.

9. National Biotechnology Research Park (Taipei City):
The PCC organized onsite visits, inspected construction quality, participated in steering committee meetings and work meetings, and accelerated the project progress. By November 2016, all building beams were in place.

10. National convention and exhibition center (expansion of Taipei Nangang Exhibition Center) :
The PCC intervened with guidance measures to put the project back on schedule. By the end of 2016, mechanical and electrical work had been completed in the first exhibition area (first three floors).

B. Resolve construction or contract problems, put capital back into markets:

The PCC actively manages project irregularities, conducts routine inspections, and has instituted a number of checks and controls so that government agencies can resolve outstanding issues and either resume work that has been suspended or reissue tenders as soon as possible. As of the end of 2016, government agencies had resumed construction or reissued tenders on 2,557 projects worth NT$25.402 billion (US$786.0 million), funds that are now available for reinvestment in other economic activities.

C. Push contractors to enhance contract performance capabilities, ensure quality of public works:

Among the 3,548 construction projects evaluated at the end of 2016 nationwide, 1,879 (52.96 percent) projects received an “A” or better rating, 1,628 (45.89 percent) received a “B,” 18 (0.51 percent) a “C,” and 23 were ungraded. The number of projects rated “A” or better this year rose 5.1 percent while the number of “C” projects declined 0.05 percent from last year.

 

IV. Advance preparations for 2017 construction licensing and permit work

In the second half of 2016 government agencies took an inventory of public works projects for 2017 and itemized 52 new ones that will involve construction work. Major construction contracts will be required for 25 of these projects, including 13 that will require a total of 26 permits in 10 categories. These projects will be placed under managerial oversight to attract more investment for domestic industries. The responsible agencies will also complete all licensing and permit procedures ahead of schedule to ensure smooth implementation of the new projects.

 

V. Conclusion

The government is promoting public works programs that will attract investment, create jobs and spur the economy over the short term while raising Taiwan’s growth potential, balancing regional development and improving the quality of life over the long term. This year’s government infrastructure projects are on schedule, and the responsible government agencies will continue to monitor projects within their remit while improving the implementation efficiency of all public works programs. The government also began monitoring new 2017 projects in advance to accelerate execution, which is expected to further expand domestic demand and generate greater momentum in the Taiwan economy.