《Abstract》 

From the late 1970s, there were many countries suffer the pressure of finance deficit and inefficiency of government. To solve those problems, the government and scholars all concern with the topic of government reform. Being a significant policy tool of New Public Management, “privatization” is exercised widely around the world. In this paper, first, we briefly described the introduction. Second, we will analysis the Privatization and the New Right: Its theoretical foundations. Third, we discussed one type of BOT Model. Fourth, we examined the pathology and the remedial strategy of privatization. Finally, we made a conclusion and focus on the case of Policy Cooperation of TRTC.

Key words: BOT, Governance, New Right, Policy Cooperation, Privatization

1.     Introduction 

From the late 1970s, there were many countries surfer the pressure of finance deficit and inefficiency of government. To solve those problems, the government and scholars al concern with the topic of government reform. In early 1980s, Under the Thatcherism and Reaganism, the core values of government reform are entrepreneurship and competition, and these are the so-called “New Public Management (NPM)” movement. Being a significant policy tool of New Public Management, “privatization” is exercised widely around the world. Not only in the western countries, the Latin America, East Europe, and Asia, and even Africa can detect privatization（Hodge, 2000; Banerjee and Munger, 2004）. However, what we are concerned with in this paper is abut the policy philosophy and policy outcome of privatization, especially the status quo of privatization based on New Right and Public Policy in Taiwan.

In this article, we will begin with the relation of New Right and Public Policy, especially in privatization and New Right, and then we want to examine the question from the fundamental idea, the so-called policy philosophy, which is usually ignorance by the policymaker in Taiwan. We try to make some points that about what is the meaning of New Right which is a basis of privatization. Furthermore, we would also like to discuss why there are some problems in privatization, and we try to provide the strategies of curing those problems. Finally, we make a conclusion of policy Cooperation of TRTC case for Taiwan’s privatization in the future.

2.     Privatization and the New Right: its theoretical foundations

2.1  a glance of privatization

As Banerjee and Munger（2004: 214） observed, In the 1930s to 1980s, the trend was toward centralization, that is the nation must have pervasive public ownership of assets. However, because of the economic conditions, international agencies and neo-conservation political ideology, the role of the state has been transformed. Jan（1993: 24-26） pointed out that four motive forces for government to amend their position, and those are pragmatic, ideological, commercial, and populist. In order to response the change, privatization becomes an useful policy tool for government.

Not only in the approach of NPM, had different approaches are also concerned the topic of privatization. In public administration, the “publicity” and “private” of privatization are argued（Lin, 2002）. From the perspective of politics, Feigenbaum and Henig（1994） considered that the privatization policy could be seen as an political phenomenon, but not an simple technical adjustment for the outside environment. Stigler（1971） and Buchanan（1986） analyzed from the economics, and pointed out that the state-owned enterprises will be short of efficiency. In the approach of NPM, how to make the government have better performance and what is the better method is a focal point, and privatization is a strategy for government to practice（Whitaker, 1994: 255）. In short, it may be desirable to mention the point of privatization as “to scale the activity of public services and the ownership of assets of government down, make the private sector play more in public services delivery, and make the role of government could have a fundamentally change.”

It is not an easy work for assessing the performance of privation in different, however, we could explore what happened of it during these two decades. In the empirical study of Banerjee and Munger（2004）, they found that some facts of privatization in developing countries, and those include early adopters are later implementers, crisis-driven, and lock-in of institutions. Besides, we could also find privatization is now a pervasive policy tool around the world through huge literatures in this new century（Hodge, 2000; Birdsall and Nellis, 2003）. All of these studies show that privatization is an hot issue of our field, however, it also prompts us to rethink one thing, and that is what Pollitt and Bouckaert（2000） reminded us “do the principles of reform in the Anglo-American Countries could be universal in different political economic context?”.

Therefore, the question now raises. If we could not distinguish the ideological basis of privatization, how could the privatization be implemented effectively? Take Taiwan for an simple example. We can find there are privatization and large-scale social welfare such as kinds of subsidies and national health insurance at the same time. Will they be contradictory? It will be helpful to understand the essence of privatization if we could explore the ideology of the New Right.

2.2  the ideology of the New Right and privatization and its theoretical foundations

As Eatwell（1989） pointed out, “the first use of terms ‘left’ and ‘right’ in the context of a specific political situation stems from revolutionary French in 1789. Subsequently, especially during the twentieth century, the terminology has become a universal aspect of political debate...,” the debate between the ideologies of left and right has influenced politics for more than two centuries. To describe the meaning of the historic development of ‘left’ and ‘right’ has its significance; however, this is not our present concern. Here we try to limit the discussion to the subject of the ‘new right’, especially its development from late1970s.

The idea of an emergent “new right” appears to have been preceded by the idea of “the new left” which could be understood as the liberationist and asserts social justice during 1960s（Scruton, 1985; Levitas, 1986; Welsh, 1993）. Welsh（1993） pointed out further, “…The new right…is essentially a ‘label of convenience’…’Left’ and ‘Right’ simply do not function in this context as mere neutral descriptions. They play an important role in distinguishing friend from foe…” Here, it seems the “new right“ is still a blurred terminology.

To explore the essence of the New Right, some concrete perspectives are provided as the following discussion. Bosanquet（1983） thought the New right is based in economics and on ideas about individualism and market while the old right was based in political philosophy and on ideas about tradition and hierarchy. King（1987） considered “the New Right has two main and mutually antagonistic strands-economic liberalism, which endorses limited government and free market, and social conservatism, which advances claims about social order and authority base on traditional social, religious and moral views.” Ashford（1993）introduced the ideas of New Right from four main schools-Milton Friedman and the Chicago school, Freidrich Hayek and the Austrian school, the Public Choice school, and the Supply-Side school. Throughout those discussions, maybe it should not be pushed too far, but there is considerable validity to say the “New Right” is based on the concepts and values of individualism, free market, and social order.

The ideas of New Right spread around the world soon after 1970s. Although Edward Heath’s Conservative Party in the UK in the late-1960s managed to assemble a policy program that approximated to what would now be seen as the New Right, most of the scholars would accept that Ronald Reagan in the Us and Margaret Thatcher in the UK were the pivots who put the New Right ideas into practice（Jordan, 1993; Ashford, 1993）. In fact, from 1990s, not only in the western countries, the New Right has begun to be promoted its influence around the world（Espinal, 1992; Minkenberg, 1992; Bronner, 1993; Castellina, 1994）. Reflecting on the policy field, we could find there are several common issues of these countries, such as reduction in inflation, reduction in taxes, privation, or constitutional reform.

What is the relation between policy ideas and policy, or more specific, the New Right and the public policy? The debates between D. King and B. Evans provided ponderable viewpoints of this issue. In 1993, King（1993） published the article of “'The Conservatives and training policy, 1979-1992: from a tripartite to a neo-liberal regime,” and explain the British training policy from four, New Right-based, components of the Conservatives training objectives which include: the weakening of trade unions and the apprenticeship system, linking the receipt of unemployment benefits with participation in training or work activity, advantaging employer preferences in the implementation of training programs, and minimizing government intervention and acting only in response to unemployment. However, Evans（1994） argued that King “exaggerates the extent the new triumph of neo-liberal ideology”, and also “exaggerates the unity of attitude, or ignores the problems of internal government fragmentation, toward training among neo-liberalism the effect of ideology in the policy-making process.” To the objection that Evans pointed out, King（1994） replied that “…Evans is still unable to grasp that no matter how often evident theoretical inconsistencies are identified in New Right arguments, these have succeeded in providing an ideology sufficiently coherent to enjoy electoral and political success…”

We admit that not like any other major political ideologies, there may be not a strong internal coherence when we discuss the New Right. Using a metaphor of “ideological stream”, however, we could still explain the relation between the New Right and the public policy. This could be shown in figure 1.

 Figure 1 Policy Ideology Stream

Sources from: Jan, 2003.[1]

        Figure 1 indicates the upstream, midstream, and downstream of the river. In the upstream, it means “the forest of knowledge” that different values and fundamental assumption of an ideology. The midstream shows the different isms which come from the ideology, just like the materials of lumber mill come from the forest in the upstream. In the downstream, the construction company will use the woods which come from the lumber mill in the midstream, and those constructions are the concrete public policy. Following the ideological stream, we could find that several values such as individualism, free market, and opportunity equality, and this will support the formation of neo-liberalism, conservatism, and neo-managerialism. Finally, some public policies, for example, like tax reduction, privatization, and social welfare reduction are based on those ideology and isms.

The theoretical foundations of New Right were Milton Friedman and the Chicago school, Friedrich Hayek and the Austrian school, the public choice school, and the supply-side school. Milton Friedman and the Chicago school emphasized that (1) inflation and the money supply; (2) capitalism, freedom and democracy; (3) the unintended consequences of government; (4) a social market economy; (5) the legitimate role of government. Friedrich Hayek and the Austrian school emphasized that (1) spontaneous order; (2) the value of liberty; (3) the limits of social science; (4) the idea of socialism; (5) the idea of social justice; (6) the principles of a free society; (7) inflation and employment. The public choice school emphasized that the expansion of government is to satisfy the references of politician, bureaucracy, and interest group. The supply-side school emphasized that it’s an efficiency way to promote economy to reducing the tax.

Those four schools will be the theoretical foundations of New Right and have an impact on Ronald Reagan in the US and Margaret Thatcher in the UK（Jan, 2003）.

Some works show the analysis and examples of the relation between the New Right and public policy further, such as King（1987）, Thompson（1990）, Ashford（1993）, Swann（1993）, and etc. From what has been said above, it can be summarized in the following sentence: though it is not a strong internal coherence in the New Right, we could still realize the relation between it and the public policy in some degree.

3. One Type of BOT Model: Micro and Macro

It has been more ten years since Chung Yuang Jan (1993) published the first book about privatization policy in Taiwan. After the understanding it brought, the concept was introduced in the public or government sector. Especially, the Build Operate Transfer (BOT) model is becoming one of the most useful privatization policy. The enormous political-social impacts of the project on Taiwan’s government and public-private relations are especially noteworthy. The experiences and knowledge gained from this case have formed an important base that should be followed by other BOT projects and PPP policies in Taiwan. Despite many studies on BOT model, the complicated and dynamic public-private relations between BOT project actors have not be fully explored. BOT is the terminology for a model that uses private investment to undertake the infrastructure development within a long-term concession period. Thus, we convinced that BOT model has two essential characteristics: (1) the project finance mechanism and (2) the long-term public-private collaboration spirit（Cheng and Liao, 2006）.

3.1 The Project of Taiwan High Speed Railway（THSR）：Mirco

    Taiwan’s BOT has its historical roots back to the early local railway construction project under the supervision of Liu Ming-Chung in Ching Dynasty. The project of Taiwan High Speed Railway (THSR), which may be the largest-scale BOT project in the world, is designed as a modern policy model of public-private partnership (PPP) . Furthermore, the Preparation Office of High Speed Rail System of Transportation Bureau was reorganized as “Bureau of High Speed Rail (BHSR)” on January 31 1997. The THSR project has started in March 1999 and is now almost to its completion stage. THSR can inject new life into townships in Northern and Southern Taiwan and bring prosperity. The economic profits were estimated the THSR is reach more than NT $ 60.1 billions per year, and the economic internal rate of return may reach 9.66%.（Cheng and Liao, 2006）. We could sum up as Table 1:

Table 1 the Estimated Economic Profits and Economic Internal Rate of Return of THSR

Source: Cheng and Liao. 2006: 12

ps: * Unit: billions; ** Unit: percentile

3.2 The Save Money of Promotion of Private Participation in Infrastructure Projects[2]: Macro

As mentioned earlier, in most of privatization cases, we can see the ideology of the New Right and privatization how to affect the public policy in Taiwan. From the perspectives of privatization, Taiwan contracting services, in general, follow the policy process to put into practice. In other words, the policy will be affected by those theoretical foundations. According to the Promotion of Private Participation in Infrastructure Projects, it encourages the private participation in Infrastructure Projects and it included of various kinds of privatization, for example, Contracting Out, BOT, OT, and etc. Advanced analysis, we can see the contribution of promotion of private participation with public sector as follows Table 2:

Table 2 The Save Money of Promotion of Private Participation in Infrastructure Projects（until 12/20/2003）

Source: Huang et al. 2003: 2-18

     ps: * Unit: hundred million dollars;** Unit: person

     Those private companies invested amount 614.8 hundred million dollars; it reduced the expenditure of government were 20.13 hundred million dollars; it also increased the expenditure of government were 23.55 hundred million dollar; and finally, it has created the employment amount were about 18,929 members. Therefore, we can see the contribution of the private participation invested with public sector. The total amount was about 670 hundred million dollars, the proportion of private companies investment amount were 614.8 hundred million dollars and it was proximately the proportions 91.2 %.

     Advanced analysis, we can see the amount of cases include in Agricultural facility 3.3%, Sightseeing facility 6.7%, Environmental pollution prevention facility 10.0%, Social welfare facility 10.0%, Commercial facility 6.7%, Transportation facility 43.3%, Culture and education facility 16.7%, and Labor welfare facility 3.3%. Especially, the most parts of the amount of cases were Transportation facility, and Culture and education facility which approximate to 53%. We could show it in Figure2.

Figure2 the category of signing treaty（category）

Source: Huang et al. 2003: 2-18

Besides, we also can see the amount of cases include in Agricultural facility 0.45%, Sightseeing facility 0.68%, Environmental pollution prevention facility 3.26%, Social welfare facility 1.02%, Commercial facility 28.09%, Transportation facility 66.20%, Culture and education facility 0.31%, and Labor welfare facility 0.01%. We could show it in Figure3.

Figure 3 the total size of signing treaty（amount）

Source: Huang et al. 2003: 2-18

If we see the total revenue from 2002-2004, we try to figure out what’s happening of this policy in Taiwan in the followings.

Table 3 the total revenues (from 2002-2004) of private sector participation in public construction

Source: Public Construction Commission (PCC) of Taiwan. 2005.; Cheng and Liao. 2006: 11-12.

Besides, Lin, Yang and Hsieh（2006）find that “policy formulation and policy

implementation are necessary to the results; however, even if most contracting literatures

argued that we need to focus more efforts including resources, money, workforces on evaluations...” and they also find the managerial ability for contract is important to successfully contracting out services; however, there are some blurred rooms not been explained and caught. Even though they analyzed the situation of contracting out of privatization in Taiwan and we still have to see the pathology and the remedial strategy of privatization.

4.     The Pathology and the Remedial Strategy of Privatization

The literature on privatization has grown at a rapid rate largely since 1980s. Not only of its importance in government policy, but also the British privatization program is widely acclaimed as a major economic and political success（Marsh, 1991: 459）. While reviewing the experiences of privatization in this decade around other countries, however, what we would like to ask here is “is privatization the panacea?” Making the question more concrete, just as what NPM movement advocates, the core spirit of privatization is “steering rather than rowing”（Osborne and Gaebler, 1992）, however, could the government be capable of steering? We will discuss two major issues, corruption and the public interest, that are usually faced when the government assets or public services are privatized.

4.1 The pathology: corruption and the ignorance of public interest

4.1.1 The corruption

Marsh（1991） reviewed the literature on privatization under Mrs. Thatcher, and found there are several aims of privatization, which include reducing government involvement in industry, increasing efficiency, reducing the PSBR（public sector borrowing requirement）, curbing public sector union power, wilder share ownership and employee share ownership, and gaining political advantage. Undeniably, those aims were on the base of the New right, and it seems the un-efficiency and financial deficits will be cured under the prescription of privatization.

Nevertheless, some bad influences happened. Besides the critiques of “hollowing government” （Lan and Rosenbloom, 1992）, “the debate of efficiency and democracy”（Bellon and Goerl, 1992）, “dominate people inside and beyond their organization”（Terry, 1993; 2005）, and etc., the problem of corruption when privatized is getting more and more serious in developing countries.

Several evidences could show these relations. Weisskopf（1992） described the negative perceptions of the link between privatization and corruption. Kaufmann and Siegelbaum（1996） considered that the scale of privatization in former Soviet Union and Eastern Europe was large and unprecedented, and at the same time, the corruption has reached endemic levels with this historic ownership transfer. Tangri and Mwenda（2001） explored the corruption and cronyism in Uganda’s privatization in 1990s, and pointed out that “discrimination and corruption privatization have been common because political leaders have wanted public companies to be divested to their favored clients. The case in China is also attracted highly attention（Chow, 2005）.

From the theoretical perspective, Kaufmann and Siegelbaum（1996） defined corruption as “…to be, simply, the abuse of official power for private gain...” They suggested that privatization per se will not suffice in addressing corruption, however, when the exercise of control rights during the privatization process, which includes speed, level of administration discretion, transparency or access to information, and independent administration of the program, are abuse, the corruption is occurred.

        For the further explanation, Kaufmann and Siegelbaum（1996） said

“…liberalization of market…in practice, however, such approaches have consistently failed to work, primarily because governments have been unable or unwilling to honor these market-friendly arrangements or separate politics from business decisions.”（p. 412）

Chou（2005） explains the corruption of bureaucracy from the economics, and thought “it is reasonable to assume, as an economic hypothesis, that the person or bureaucrat having control of such an asset will take advantage of his control to maximize his gain, possibly illegally subject to the consideration of the risk of punishment.” The principal-agent theory also provides a useful analysis framework to this issue. The problems of different interests and goals between the principal and agents（Alchian and Demsetz, 1972）, adverse selection and moral hazard（Arrow, 1991）, and contract designation（Horn, 1995） are significant for government when privatized.

In other words, to make a summary, the government might be corruption during privatization is due to two major reasons: the governments are incapable of supervising, or some affiliates with the power of the government try to maximize their gains from privatization.

  4.1.2 The ignorance of public interest: Damaged or Enhance?

Public interest, which might have mutual relation with government corruption, is a more general issue and need deliberated discussion of privatization. To the development of public administration, public interest always plays a role of axis（Hart, 1984; Ventriss, 1991）. During the period of New Public Administration（NPA） that advocated by D. Waldo et al. in 1960s, the debate of public interest reached a high peak. In the early 1990s, it was become a core argument of “The Blackburg Manifesto.”

In order to sketch a useful and pragmatic meaning, Goodsell（1990） suggested there are both process and substantive standards when understand public interest. He identified six constitutive rules or values that are reinforced by the concept of the public interest and speak directly to the world of public administrator, which are legality-morality, political responsiveness, political consensus, concern for logic, concern for effects, and agenda awareness.

Will privatization serve public interest? Goodman and Loveman（1991） pointed out that critics of privatization believe that profit-making strategies by private sector managers will make essential public services unaffordable and unavailable to large segments of the population. They considered “the problem is not private ownership, but the controls and performance measurements of the private owners.” Hefetz and Warner（2004: 187） suggested, after their empirical survey, “public choice theory offers markets as a mechanism to improve public service delivery, but we have shown that even under contracting, market solutions are not a substitute for government planning and management.” It is also what NPM has been challenged for “hollowing government”（Lan and Rosenbloom, 1992）” or “eroding the publicness of public service”（Christensen and Laegried, 2002）.

Some scholars try to reconciliation the privatization and public interest, and make the point of them could be compatible. Hurstel and Mary（1994） explored concession of privatization, and thought “if a system of concession is implemented, the conception of privatization will be more easier accepted as it will not jeopardize the protection of the public interest.” Lin（2002） explored the characteristics of public interest and efficiency of privatization, and try to ensure the public interest in the premise of efficiency. Chen（2005） established a counter-argument and showed that the theory of public choice could contribute greatly on the issue of “publicness” in public administration.

The lack of criteria of measuring the public interest, however, still stimulates scholars to continue their endeavor on the exploration. In stead of an extensively discussion, some scholars focus on the issues of accountability, and equity. For the former, Goodman and Loveman said（1991: 38）“accountability and consonance with the public interest should be the guiding lights（in privatization）. They will be found where competition and organizational mechanism ensure that managers do what we, the owners, want them to do.” Gilmour and Jensen（1998） also argued “that the existence of an effective public accountability scheme requires a coherent understanding of state action—both before and after privatization decisions.” In the issue of equity when privatized, scholars pay attention to the impacts on privatization on distributional equity（Birdsall and Nellis, 2003） and universal service（Lin, 2004a; 2004b）.

In short, with the development of transaction theory, principal-agent theory, and public choice theory, we could accept the explanation and necessity of privatization when the government was failure. However, those theories will also remind us the problems of who serves the public interest. If the private mangers or firms serve public on the basis of self-interest when privatized, it will be inevitable to bring the bad influence on shirking, unaccountability, or inequity of distribution. As mention earlier, we can figure the pathology as Table 4:

Table 4 the Pathology of Privatization

Source: author

4.1.3 The problem of Promotion of Private Participation in Infrastructure Projects

In this part, we will analysis the problems of promotion of private participation in

infrastructure projects, the main questions as follows（Huang et al. 2003: 5-93; Lin, and Chang. 2006）:

  （1）The will of private investment is insufficient of the primary stage

The promotion of private participation in public construction, and it‘s completely to be decided by whether it has the profit and provides the reasonable reward. Therefore, those reasons are to attract the private participation in infrastructure projects.

  （2）The private corporation has the right to handle the superficies[3]

Besides it obviously violates the public welfare, or it should not receive excessively too many nonessential limits. It has the right to have attached enterprise to develop the construction.

  （3）The execution ability of sponsor institution

No matter how the size of public construction of the BOT, the government certainly must have a more complete feasibility to appraise the execution ability.

  （4）Performance: Less or More?

  The Government thought the evaluation of public delivery has its difficulties, and the governmental agency lacks the experience of performance.

4.2  the remedial strategy

As we noted above, two major pathologies, corruption and the ignorance of public interest, will occurred when privatized due to（1）governments are incapable;（2）the political affiliations want to maximize their self interest or abuse their power; and（3）the speculation of self-interest of economic institutionalism, and it includes the self-interest of private managers and firms. The former（self-interest of the individual persons） usually led to unaccountability, and the later（self-interest of the organization） will result in the inequity of distribution.

In order to remedy those pathologies, we try to provide some suggestions in the following:

（1）    To re-enforce the steering ability of government

New Public Management emphasize in steering rather than rowing. We think governments should pay more attention to the formulation of vision of privatization. In the other side, governments should also enforce their own capability to face the new challenge of social transformation.

（2）    To improve the institution arrangement

Transparency is one of the most significant elements of democracy and equity. In order to have a healthy democratic, free and competitive market, we should also strengthen the supervise mechanism for the privatization. In other words, an important feature of any contract is a clear and mutually understood specification of each party’s contract obligations and how the contractor’s performance will be assessed of privatization.

（3）    To increase the cost of shrinking and the incentives to act in the public interest

What is “public” interest is hard to define by private managers. However, it could be defined as “the interest of stockholders” in minimum scope. Here we need to provide incentive to stimulate their motivation to act in the public interest, such as the rewards or commend, and in the other side, to increase cost like penalty is also feasible.

（4）    To ensure the universal service while privatized

To the private organizations, to profit themselves is always prior than make interest to the public. To ensure of public interest, not only reminding those organizations the conception of social responsibility, we could but also ask government to design an incentive mechanism to encourage private to serve the disadvantaged groups when privatized.

5. Conclusion: Policy Cooperation of TRTC case

  Although Taiwan’s privatization had the above questions, it certainly does not represent the privatization is not feasible. On the contrary, we take a more successful case of TRTC to explain the process of privatization.

5.1 The introduction of TRTC company and its lines

Even though we discussed the shortcomings of privatization, we also can see the successful one which is the Taipei Rapid Transit Corporation（TRTC）case. The Governance of New Right and Public Policy have a impact on TRTC case and TRTC is a State-Owned Enterprise of Taipei City Government. The development of total chronicles of TRTC was as Appendix 1 and its main line of Metro Network as Appendix 2. The brief history of approval was on the initial route network plan of Taipei Metropolitan Rapid Transit Systems by Executive Yuan on Mar. 27, 1986. Then, Taipei Rapid Transit Corporation incorporated its operation on Jul. 29, 1994（TRTC website）.

The construction and operation of a mass rapid transit system for Taipei is a good solution to this long-existing traffic problem, for it improves the flow of traffic lines, revitalizes the proper functioning of the city and promotes the re-development of inner city and satellite towns. The first stage of Taipei’s Metro system has seven lines：Muzha Line, Danshui Line, Zhonghe Line, Xindian Line, Banqiao Line, Nangang Line, and Xiaonanmen Line. These form the preliminary network for Taipei’s Metro system and in cooperation with others means of public transport, have provided the people of Taipei with a comprehensive and convenient public transport network（TRTC website）. The second stage of Taipei’s Metro system is the circular line. The third stage of Taipei’s Metro system are Wada － Shulin Line, An-Keng Line, Min-Sheng Sijhih Line, South and North Line, Danhai Line, and Shetz Railway Line. The detail is as Appendix 3.

5.2 Taipei County Corporate in TRTC

If we take the Taipei Rapid Transportation Corporate for an example, the Taipei Rapid Transportation Corporate also called TRTC is consisting of the institutions from Taipei City, the institutions from Taipei County, and the Taipei Rapid Transportation Corporate company. Therefore, we can see the history of all of the institutions to help us understand the introduction of TRTC. TRTC is dominated by Taipei City Government（TCG）, and the purpose is to develop Taipei Metropolitan Area; therefore, the involving parts from Taipei County Government are much less than TCG. However, without the help and the assistance from the Department of Traffic in Taipei County Government, TRTC can’t be implemented. However, we can see the policy cooperation between Taipei City Government and Taipei County Government.

5.3 TRTC Organization[4]

  The TRTC organization included of Taipei City Government, Taipei County Government, Ministry of Finance, other corporations, as follows:

5.3.1 Taipei City Government

Taipei City Government（hereafter, TCG）is the leading public administrative corporation in TRTC policy. Since this policy is initial from the demand of Taipei City and the Taipei Metropolitan Area, and the most important reason is that was empowered from the law which was drew by the central government. Therefore, considering the political power, financial power, population demand, and the rules from law, TCG is the most important shareholder with 73.75% stock.

5.3.2 Taipei County Government

County stands in the assistant role in TRTC policy; therefore, it is the shareholder with 8.75% stock.

5.3.3 Ministry of Finance

It is the only central governmental sector in TRTC. Since TRTC is the important policy with the importance of modernization, central government must get involve in part of it in order to catch up with the newest situation. So Minister of Finance is the shareholder with 17.14% stock.

5.3.4 Other corporations

Tang Eng Iron Works Co., Ltd., Taipei Fubon Bank, Chiao Tung Bank, and Farmer’s Bank of China: they are the private sectors which are also the shareholders of TRTC with 0.36% stock. We could show the Figure 3 as following:

Figure 4 the stockholder of TRTC organization Structure

Source: the website of TRTC

  According to Figure 4, we can see the stock of TRTC organization Structure, and there are: the 73.75% stock of Taipei City Government. Therefore, the Taipei City Government leads the operating right of this group. Even though there are still some little problems about the balance of local power between TCG and Taipei County Government.

5.4 The next step of TRTC and its adjunctive line

Besides the development of total chronicles of TRTC was as Appendix 1, Taipei County Government will do the next step which is Circular line: that is 14 stations – Wu Gu Industrial District Station, 14 stations - Large Pinglin Station, Large Pinglin Station to Taipei Zoo Station, and the time will be constructed during 2010-2018. Recently, the Taipei County Government yesterday announced that it gives up the BOT way and it does not allow the contracting out to private company and will be contracting out to the

 Department of Rapid Transit Systems, Taipei City Government（UDN news website, 4/20/2006）. According to the Sina news, Taipei County Government wanted to change the BOT way into the construction by Taipei County Government because of the“corruption of Kaoshiung Mass Rapid Transit”and the“Quality and Safety of the construction and etc（Sina Corporation Website）.”Especially, Chou told “a press conference that the county government has decided to build, own and operate its own MRT system after seeing how the BOT model adopted by the Kaoshiung City Government for its MRT railway project was used for alleged illegal profiteering by officials working in collusion with contractors（Taipei Times）.” If the BOT way turned into the construction by Taipei County Government, therefore, the Taipei County Government has decided to build, own and operate its own belt railway. According to the China Times News website, we will see the burden as Table 5.

Table 5 the Burden of Taipei County Government

ps: * Unit: billions

Source: China Times News Website, visited on 4/21/2006

 We can analysis those reasons of Taipei County Government Mayor Chou from the BOT to build, own and operate its own by Taipei County Government, as follows:

Table 6 From the BOT to build, own and operate its own by Taipei County Government

Source: author

Why does the Mayor Chou not take the BOT way? Dos the BOT or privatization have the question? We don’t know of this case, but we know that the most important is it brings the traffic convenient for the public and promotes the policy cooperation among Taipei City Government, Taipei County Government and other（private）corporations. At the same time, this is also the relation of Public and Private Partnership; therefore, we think it’s the key point for this case.

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Appendix 1 the development of Chronicles of TRTC

Source: the website of TRTC

Appendix 2 Main Line of Metro Network

Source: the website of TRTC

Appendix 3 the total stage of Construction Line of TRTC

Source: the website of TRTC; the website of wikipedia http://zh.wikipedia.org/wiki/