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Eurotrain raises doubts over Taiwan's rail switch

TAIPEI: The battle to build Taiwan's high-speed railway intensified on Friday when European rail consortium Eurotrain raised doubts about the technology being offered by Japanese bullet-train rival Shinkansen.

The Franco-German-Anglo consortium, trying to get its bid for $3 billion worth of train, rail and switching contracts back on track, said that by choosing Shinkansen, Taiwan was opting for untested technology.

Japan's bullet-train consortium "is offering a signalling concept which is fundamentally different to that employed in Japan and which has yet to be designed, tested and approved," Eurotrain said in a statement.

"This raises serious doubts regarding the acceptability of what is an unproven system."

Eurotrain, which comprises Germany's Siemens and Anglo-French group GEC-Alsthom, said its system, by contrast, was deployed widely and demonstrated in 1998 to Taiwan's "complete satisfaction".

Shinkansen's sponsors could not be reached for comment.

BREACH OF CONTRACT: Eurotrain on Wednesday sued Taiwan High-Speed Rail Corp, a private group sponsoring the 345-km (215-mile) island-spanning railway, for allegedly reneging on a 1997 contract that awarded priority negotiating rights to Eurotrain.

In December Taiwan High-Speed announced it was awarding priority negotiating rights to the makers of Japan's Shinkansen and vowed to sign final contracts in January.

No court decision had been issued as of Friday.

Eurotrain's lawsuit seeks to block Taiwan High-Speed from conducting negotiations or concluding contracts with Shinkansen.

"Eurotrain played a major role in the formation of the Taiwan High-Speed Rail Consortium and its proposals for supply of the core system formed an essential part of the winning bid made by in 1997 in competition with the Japanese system," it said.

Taiwan President Lee Teng-hui on Friday rejected Eurotrain's complaint, saying his government had no say over the contract because the railway is a purely private undertaking.

SIEMENS CEO SPURNED: Siemens chief executive Heinrich von Pierer lobbied Lee and Prime Minister Vincent Siew on Friday for a reversal but came away empty-handed.

"Of course I expressed my disappointment but the president said this was a private project and he was not in a position to say anything," von Pierer told Reuters in an interview.

"Both the president and premier emphasised that there was no political interference" behind the switch to Shinkansen, he said.

Von Pierer said the bullet-train bidding was marred by a lack of transparency, implying this made the competition unfair.

"This has to be made transparent; this is the only way to do business," he said.

Taiwan High-Speed has vowed to press ahead with Shinkansen unless enjoined by the court, saying it had no binding deal with Eurotrain and branded the lawsuit a "commercial ploy".

The Shinkansen group is led by Mitsui & Co and links Mitsubishi Corp, Marubeni Corp, Sumitomo Corp, Mitsubishi Heavy Industries Ltd, Toshiba Corp, and Kawasaki Heavy Industries Ltd. Kawasaki would build the trains and Mitsubishi the signals.

Alsthom is a joint venture of Britain's Marconi Plc and France's Alcatel Alsthom.-Reuters