Premier Sean Chen said September 26 that public construction campaigns to stimulate the economy need to get in gear, and he issued an ultimatum demanding all Cabinet ministries and agencies to "do whatever it takes to achieve their objectives" in this area by the year's end.
He also directed central and local governments to encourage more private investment in public infrastructure and said the Executive Yuan will keep a close watch on the progress of these projects, demanding explanations from ministerial heads if their projects are behind schedule.
Premier Chen made these remarks after he was briefed in a Cabinet meeting by the Public Construction Commission and the Financial Supervisory Commission on promoting investment in public infrastructure. These directives echoed his declaration in a September 23 Cabinet meeting that all agencies should redouble their efforts to execute government policies.
On September 24, Cathay Life Insurance Co. won a bid for a 50-year lease from the Bureau of High Speed Rail to invest more than NT$20 billion (US$667 million) to develop the Taoyuan Station designated industrial zone. Premier Chen said this project, whose contract will be signed by the end of this year, is highly significant because it is the first investment in the Taoyuan Aerotropolis project from the life insurance sector, which the government is urging to participate in public construction projects.
Since a shortfall of over NT$100 billion (US$3.4 billion) is projected in the government's 2013 budget, and estimated expenditures on yet-to-be-implemented public construction projects under the Executive Yuan's oversight amount to about NT$211.67 billion (US$7.06 billion) of the 2012 budget, Premier Chen directed central government agencies to cover their funding shortages with private investment and encourage local governments to do the same. Projects' necessity and priority should be taken into consideration, as well, he added.
Chen also instructed Minister without Portfolio Chern Jenn-chuan, who concurrently serves as convener of the Executive Yuan's task force on promoting private-sector participation in public construction projects, to report on the progress of those initiatives in the following week's Cabinet meeting. At that time, the heads of respective ministries will also elaborate on their project execution rates and provide explanations for any projects that are behind schedule.
The premier also instructed Chern to bring together the Ministry of Finance and other related agencies to meticulously map out a system for implementing private finance initiative (PFI), including the government's role in it and relevant legislation. Since most agencies do not have experience with this model, he also asked Chern to select a case of its implementation to serve as an exemplar.
The premier indicated that public construction funding should come from diverse sources, and the private sector can participate in such projects in various ways. He expressed hope that while many agencies could adopt the build-operate-transfer (BOT) model, which they are all familiar with, they could also consider PFI after referring to the model introduced by Chern.
The ordinance confining the operation of social welfare institutions such as nurseries and nursing homes to juridical bodies and excluding investments from the insurance sector was also addressed at the meeting. The premier directed Chern to call together the Department of Health, Ministry of the Interior and other relevant agencies to discuss this legislation and study other countries' examples and experiences. After concluding the best policy, the group may draft a bill for legislation. In the meantime, it should step up communication with the Legislature about the issue, Chen said.