The Republic of China Yearbook 2009

CHAPTER 13 Transportation and Telecommunications

Transportation

Land Transportation

Roads

A little over 40,000 kilometers of roads connect locations around Taiwan, most of them concentrated in the half of its 36,000-square-kilometer area that is not occupied by mountains. Two main highways, the Sun Yat-sen Freeway and the Formosa Freeway, serve the densely populated west coast of the main island. The 373-kilometer-long Sun Yat-sen Freeway was built in the 1970s to facilitate Taiwan’s economic development by improving transport links between industrial parks and seaports. As traffic started to outgrow this highway, construction on the 432-kilometer-long Formosa Freeway began in 1987 and was finished in 2004. These north-south freeways are interconnected by numerous east-west routes.

Transportation networks are less developed in eastern Taiwan, which, compared with western Taiwan, has a much smaller area of level land and is less populous and industrialized. As growing prosperity has boosted domestic tourism, however, higher priority is being given to economic development in this region, which is known for its natural beauty. A national eastern coastal freeway that will eventually link Taipei in the north to Pingtung in the south is now under construction. Some sections have already been completed, including the Chiang Wei-shui Freeway, which traverses a mountain range between Taipei and Yilan counties through the 12.9-kilometer Xueshan Tunnel—the world’s fifth-longest highway tunnel.

In 2008, the 23 toll stations located along Taiwan’s three national freeways recorded a daily average of 1.49 million cars, 4.8 percent less than the previous year. The standard tolls were NT$40 for cars, NT$50 for buses and trucks and NT$65 for trailers (about US$1.30, US$1.60 and US$2.10, respectively), which could be paid with coupons, cash or via an electronic toll collection system that was activated in February 2006.

Public and Commercial Vehicles

The number of long-distance passenger buses in Taiwan has steadily increased as transportation networks have improved, with some 7,200 highway buses serving a total of 246 million passengers in 2008. For short-distance travel, some 5,800 city buses served 808 million passengers in 2008. Taiwan had about 88,880 taxis in 2008, over half of which were operated by taxi companies and cooperatives. Taipei City has moved to ease traffic congestion by building dedicated bus lanes along major roads.

Meanwhile, domestic shipping via all types of transportation logged some 30 billion tonne-kilometers in 2008, with about 91,000 vehicles carrying 604 million tonnes (metric tons) of cargo.

Personal Transportation

The number of privately owned four-wheel vehicles in Taiwan registered a slight drop from the previous year, totaling nearly 5.7 million in 2008. Motorcycles (including scooters and mopeds) are an extremely popular method of transport, as they are cheaper and more fuel-efficient than cars. They also allow for greater mobility in heavy traffic and can be ridden all-year-round in Taiwan’s predominantly semi-tropical clime. The shortage of parking spaces in Taipei has been addressed through government and private investment in parking lots and parking towers for cars, and parking bays designed for motorcycles.

Starting on November 1, 2007, motorcycles with large engines (with displacements of 550 cubic centimeters or greater) were allowed to use all lanes of city roads and expressways with speed limits not exceeding 90 kilometers per hour. Previously, like even the smallest, slowest mopeds and bicycles, they were required to use the lane closest to the side of the road in cities and were prohibited from using freeways. They are still prohibited from using freeways with maximum speed limits of between 90 and 110 kilometers per hour, but an assessment is under way on the possibility of lifting all restrictions. There were some 14.4 million motorcycles and motor scooters in Taiwan at the end of 2008, with approximately 20,000 of them powered by 550 cubic centimeters or larger engines.

Railways

Taiwan has a public railway system as well as a privately run high-speed railway. Its public rail operator, the Taiwan Railways Administration (TRA), provides frequently scheduled, reliable service between more than 200 stations. Its operating routes, about 60 percent of which are double-track lines, total approximately 1,100 kilometers in length. While an expanding road network has led to a decrease in the volume of freight transport via rail, rail passenger services have grown, with the average daily number of passengers traveling by the public railway system reaching nearly 490,000 in 2008. In that year, the ratio of passenger-kilometers to freight tonne-kilometers climbed to 9.4-to-1 from 2-to-1 four decades earlier.

The TRA offers passenger services ranging from long-distance super express trains that stop only at major stations to ordinary long-distance and local commuter trains that stop at all stations. The latter two types carry about three-fourths of passengers. The passenger volume of the fastest trains, which accounted for 17 percent of TRA passengers in 2008, has been diminishing in recent years due to the popularity of high-speed rail service among long-distance travelers.

In response to mounting competition, in May 2007 the TRA started to operate the eastern coastal Taroko Express, which employs a tilting technology that allows it to negotiate bends at high speeds. This has reduced travel time from Taipei to Hualien from 2.5 hours or more to just under two hours.

In addition, the TRA is now focusing on providing better service for passengers traveling on short-distance routes. New stops are being added, and the majority of newly purchased rail cars are intended for commuter services.

Meanwhile, construction is under way to transform sections of mainline railways into rapid-transit-type operations. As of the end of 2008, 85.4 percent of the section between Tainan County’s Xuejia and Guiren townships, 75.5 percent of the section between Hsinchu City and Neiwan Village in Hsinchu County’s Hengshan Township, and 33.8 percent of the section between Kaohsiung and Pingtung cities had been completed. Further, about 13.5 percent of projects to move rail tracks underground in Kaohsiung City had been completed as of the end of 2008, while projects to raise tracks on elevated overpasses in the greater Taichung area and Yuanlin Township of Changhua County were 6.2 percent and 7.8 percent completed, respectively.

High-speed Rail

The privately run Taiwan High Speed Rail (THSR) commenced operations in January 2007. The 345-kilometer railway system currently serves eight stations (Taipei, Banqiao, Taoyuan, Hsinchu, Taichung, Chiayi, Tainan and Zuoying) with trains that can travel at speeds of up to 300 kilometers per hour, reducing the travel time between Taipei and Kaohsiung from over four hours to just 90 minutes. In the future, an additional four stations will be built in Nangang, Miaoli, Changhua and Yunlin.

The THSR combines technologies from a number of countries. The Taiwan High Speed 700T trains were built by Kawasaki Heavy Industries, modeled on Kawasaki’s 700-series Shinkansen bullet trains, and 80 percent of the tracks use Shinkansen technology, representing the first time that such technology has been exported from Japan. German tracks are used on elevated bridges. Its telecommunications system was imported from France, while its automatic control system is similar to that used in most European countries.

The construction of the high-speed rail system was Taiwan’s first major infrastructure project to employ a BOT (build-operate-transfer) model.

The THSR transported an average of 85,750 passengers daily in December 2008, up from 26,000 at the beginning of operations. In 2008, high-speed trains made 45,900 trips with a 99.2-percent rate of punctuality, carrying more than 30.5 million passengers, an increase of 96.6 percent as compared with 2007. Initially, it ran 19 trains per direction per day, increasing to between 65 and 70 trips in each direction by the end of 2008.

Meanwhile, the Taiwan High Speed Rail Corporation has improved its ticketing system by providing telephone and online booking options. The cheaper non-reserved seat service provided since November 2007 has enabled more people to enjoy the experience and convenience of riding on a high-speed rail.

Rapid Transit

The Taipei Mass Rapid Transit system, more popularly known as the MRT or the Taipei Metro, has greatly alleviated traffic congestion and parking problems in Taipei City. The system, whose construction was launched in 1988 and which currently has eight lines in operation, transported an average of more than 1.2 million riders per day in 2008.

Plans are in place to extend the network from its existing 78 kilometers to a total of 280 kilometers by 2021, with 78 kilometers of track under construction in mid-2009. As of December 2008, 96.8 percent of the Neihu Line, 77 percent of the Xinzhuang Line and 89.8 percent of the Luzhou Branch Line had been completed. The Neihu Line began operations in July 2009.

Besides ongoing work on the above-mentioned lines, the Xinyi, Songshan and Nangang eastern extension lines, as well as the Taiwan Taoyuan International Airport Line connecting with Taipei Main Station, are under construction.

For four years from 2004 to 2007, the Taipei Metro was rated as the most reliable system in the world by Nova International Railway Benchmarking Group and CoMet (Community of Metros).

Construction of a rapid-transit system in Taiwan’s second-largest city of Kaohsiung started in 2001, and the system’s red and orange lines began operations in April and September 2008, respectively. As of the end of 2008, commuters had performed some 29.5 million trips on the Kaohsiung Metro, which spans about 43 kilometers, has 38 stations, and is integrated with the THSR and TRA railways as well as the city bus system to form a comprehensive transportation network.

Shipping and Ports

In 2008, the nation’s shipping fleet consisted of 267 vessels with a combined tonnage of 2.87 million gross tonnes (approximately 4.71 million deadweight tonnes). Although only 19 percent of the fleet engaged in international operations, such operations accounted for the bulk of shipping volume in 2008. Among international carriers, Evergreen Marine, Yang Ming Marine and Wan Hai Lines provided container transport services, while China Steel Express, U-Ming Marine and Ta-Ho Maritime offered bulk freight services. Domestic carriers offered both passenger and break-bulk cargo services between Taiwan and its associated islands.

Taiwan’s seaports are built to meet the demands of a trade-oriented economy. There are seven international ports in Taiwan. The four main ports located in Keelung City, Taichung County, Kaohsiung City and Taipei County’s Bali Township—the latter called the Port of Taipei—handle container shipping. The smaller facility at Su-ao Township in Yilan County is auxiliary to Keelung, while Tainan City’s Anping Port is auxiliary to Kaohsiung. Hualien City’s port, meanwhile, handles bulk cargoes.

The Port of Taipei, inaugurated on March 9, 2009, has the nation’s third-largest maritime shipping facilities following those of Kaohsiung and Taichung, and is about five times the size of Keelung’s. The two container piers currently in operation there are among seven that are scheduled to be completed by 2014, with a combined annual container handling capacity of four million TEUs (twenty-foot equivalent units).

In 2008, around 74,250 ships visited these ports, handling a total of 12.98 million TEUs. That year, the Port of Kaohsiung handled 9.68 million TEUs of cargo, followed by Keelung’s 2.06 million TEUs. Construction of a new intercontinental container terminal is under way in Kaohsiung, and free trade zones (FTZs) have been established in the ports of Kaohsiung, Keelung, Taichung and Taipei. As of the end of 2008, 62 licenses had been issued to manufacturing and other businesses in the FTZs, including 25 in Taichung, 25 in Kaohsiung, 10 in Keelung and two in Taipei.

On November 4, 2008, Taiwan’s Straits Exchange Foundation (SEF) and mainland China’s Association for Relations Across the Taiwan Strait (ARATS) reached agreements that include opening direct shipping links across the Taiwan Strait (see Chapter 11, ‘‘Cross-strait Relations”). Shipping companies can now transport goods directly without detouring via Japan’s Ishigaki Island. Taiwan has opened up 11 ports for direct cross-strait shipping versus 63 in mainland China. These new links have greatly reduced transportation time and costs.

The Ministry of Transportation and Communications (MOTC) launched MTNet—the Maritime Transport Network Portal—in January 2006 with the aim of developing Taiwan into an operations hub in the Asia-Pacific region. The Web site enables Taiwan’s harbors to operate more efficiently and make it easier for shipping and container terminal service companies to complete registrations and applications and access shipping-related data. By September 2007, all shipping operations had been incorporated into the portal, which had registered 644 applications as of the end of 2008.

Civil Aviation

As of December 2008, a total of 35 airlines provided flights to destinations in Taiwan, of which 23 were foreign and 12 local. International flights accounted for 78 percent of all passengers served by Taiwanese airlines in 2008, up 3.3 percentage points from 2007. The number of international flight passengers, however, decreased by 6.9 percent, from almost 18.5 million in 2007 to 17.2 million in 2008. This trend continued in the first half of 2009, with international travelers accounting for 79 percent of all passengers though international passenger volume was down 5.76 percent from the same period in 2008.

Meanwhile, international cargo shipments made up approximately 97 percent of all cargo transported by air in 2008 and 96 percent in the first half of 2009.

Increasing competition from ground transportation networks—particularly the high-speed rail—has taken a toll on domestic air transport business, with the number of passengers on domestic flights dropping by over 20 percent in 2007 and 2008. The first half of 2009 saw a further drop of 13.1 percent as compared with the same period in 2008. The volume of domestic air cargo shipping also dropped by 8.2 percent in 2008 and 0.9 percent in the first half of 2009. To counteract these developments, the aviation industry has been focusing efforts on opening new international routes and improving airport facilities.

In line with agreements reached between the SEF and ARATS, cross-strait charter flights commenced on July 4, 2008. Five Taiwanese and six mainland Chinese airlines, providing 36 round-trip flights per week, had served some 336,000 passengers as of December 14, 2008.

A new round of agreements reached on November 4, 2008 expanded weekend charter flights to daily charter service beginning December 15, 2008. Carriers of both sides can now fly directly to their destinations without need of detouring via Hong Kong airspace. Five Taiwanese and nine mainland Chinese airlines offering 108 round-trip flights per week had served some 1.25 million passengers across the Taiwan Strait by the end of June 2009.

As of that time, 205 direct cross-strait cargo flights, which also began in December 2008, had transported nearly 23,000 tonnes. Further, Taiwan’s TransAsia Airways conducted 20 medical emergency charter flights across the Taiwan Strait in 2008 and nine in the first half of 2009.

On April 26, 2009, the SEF and ARATS signed a Supplementary Agreement on Cross-strait Air Transport, which calls for scheduled flights between major airports in Taiwan—including Taiwan Taoyuan International Airport and Kaohsiung International Airport—and mainland China. Two new direct cross-strait air routes— one in the south, the other in the north— were established. Six new mainland flight destinations brought the total there to 27, while the number of destinations in Taiwan remained at eight, of which six continue to be destinations for charter flights only.

By the same agreement the number of round-trip passenger flights per week was increased from 108 to 270, while scheduled cargo flights per week were increased to 28. In addition, cargo can be transported in the belly compartments of passenger planes.

In the future, airlines of both sides can be expected to establish representative offices at flight destinations on the other side of the strait.

Airports

There are currently two international airports in Taiwan: Taiwan Taoyuan International Airport (TTIA, formerly known as Chiang Kai-shek International Airport) in the north and Kaohsiung International Airport in the south. TTIA has two passenger terminals, with a total annual handling capacity of 29 million passengers. A rapid-transit link connecting the airport with Taipei City is scheduled for completion by 2012. Kaohsiung International Airport has two passenger terminals serving international and domestic air transportation needs.

Taiwan has 16 domestic airports. Eight are located on Taiwan proper in Taipei, Tainan, Pingtung, Hualien and Taitung cities, in Taichung and Chiayi counties, and in Hengchun Township; three in the Penghu Islands; two in the Matsu Islands; and one each on Orchid Island, Green Island and Kinmen Island.

On January 12, 2009, the Legislature ratified the International Airport Park Development Act. The law will serve as the legal basis for transforming areas surrounding TTIA into an “aerotropolis” comprising the airport proper, an FTZ, logistics and international conference centers, hotels, shops and restaurants, among other facilities. Currently, the construction of public infrastructure in the FTZ has been completed and, as of December 2008, 45 manufacturers had taken up residence there, while 31 of which had begun operations.

Postal Services

Chunghwa Post Co., Ltd. operates the bulk of nation’s postal services, covering mail and parcel deliveries, savings and remittances, sales of simple life insurance, philately and other businesses approved by the MOTC.

As of 2008, the company ran 23 main post offices, five mail-processing centers and 1,321 branch offices. There were an additional 411 Chunghwa-authorized postal agencies and 809 stamp sales agencies.

In 2008, Chunghwa Post handled 2.65 billion letters, 6.29 million pieces of express mail and 24.27 million parcels— representing, respectively, a decrease of 0.9 percent and an increase of 8.6 percent and 21.6 percent over the previous year. At the end of 2008, the balance of postal savings amounted to NT$4.46 trillion (US$141.50 billion) and income from simple life insurance premiums amounted to NT$140.1 billion (US$4.45 billion), registering increases of 7.8 percent and 5.67 percent, respectively.

Direct postal services between Taiwan and the Chinese mainland were launched on December 15, 2008.

E-Traffic

The MOTC’s Institute of Transportation launched a Web site (http://e-iot.iot. gov.tw) in 2004 that displays current traffic conditions around Taiwan, enabling drivers to avoid traffic jams and find alternative routes as early as possible. In addition, visitors to the Web site can obtain information on fares, timetables and routes of long-distance buses, TRA trains, high-speed trains, flights and boats plying waters between Taiwan proper and offshore islands. Also available on the Web site is an e-transit service providing information on city buses, intercity buses and rapid-transit systems in Taiwan’s various urban areas.

The MOTC is also working to develop “intelligent” transportation and freight-handling management systems that will integrate and speed up ticketing, customs clearance, transfer of cargoes and other processes through computerization, automation and Internet connectivity.

Telecommunications

Taiwan’s telecommunications market has developed at a rapid pace since its liberalization in the mid-1990s. Like many other developed nations, Taiwan’s mobile phone market faces saturation as the penetration rate hovers at around 100 percent. Stagnant growth has led to fierce competition between network operators as they vie to develop strategies to expand their market shares.

Major Players

Fixed-line telecommunications services, in past times monopolized by the formerly state-run Chunghwa Telecom, are now also available from three private integrated network service operators: Taiwan Fixed Network, New Century Infocomm Tech and Asia Pacific Telecom. Local fixed-line telephone subscribers numbered 13 million, representing a decrease of 1.65 percent over 2007 and a penetration rate of 56.8 percent. Although in 2008 Chunghwa Telecom—in which the government’s stake stood at 35.3 percent—maintained its hold on the market, serving over 97 percent of total subscribers, it no longer had a competitive edge in international telephone services.

Taiwan has four second-generation (2G) and five third-generation (3G) mobile phone carriers. Chunghwa Telecom leads the mobile phone market, followed by Far EasTone Telecommunications and Taiwan Mobile. Chunghwa, Taiwan Mobile and Far EasTone lead the market for 2G services.

In order to improve indoor coverage, mobile phone operators have deployed miniature Femtocell base stations that are linked to mobile phone signal transmission equipment via fixed-line broadband Internet connections.

The Internet

The public and private sectors have been quick to embrace new Internet technologies, thereby establishing Taiwan as one of the leading e-societies in the Asia-Pacific region. In the World Economic Forum’s Global Competitiveness Report 2008-2009, Taiwan’s information technology (IT) development earned it the No. 13 (out of 134) ranking for “networked readiness.” In the “IT industry competitiveness index” released by the Economic Intelligence Unit in 2008, Taiwan moved up four notches to second place in the world and first place in the Asia-Pacific region. Further, Taiwan was ranked second for e-government performance in a global survey published by the Brookings Institution in 2008.

Broadband subscribers in Taiwan stood at 7.13 million at the end of 2008. Among them, some 4.29 million accessed the Internet via fixed telephone lines, 649,000 via cable modem, 1.26 million via optical fiber and 34,000 via leased lines.

To keep Taiwan on par with international standards and provide more advanced broadband services, efforts are now being focused on developing WiMAX (Worldwide Interoperability for Microwave Access) infrastructure. Featuring advanced wireless broadband technology based on International Telecommunication Union standards, with a transmission range of tens of kilometers, the development of WiMAX is a major goal of the Mobile Taiwan program, launched in 2005.

In October 2005, Taiwan’s Ministry of Economic Affairs signed an agreement with the U.S.-based Intel Communications Group to cooperate in transforming Taiwan into a base for developing WiMAX technology. A month later, the ministry unveiled the WiMAX Acceleration Plan, under which local manufacturers can receive government funding for WiMAX-related R&D. Today, more than 20 companies are developing base-station and other WiMAX equipment that will drive the industry.

Meanwhile, at the WiMAX Forum held in Taipei early in 2007, Taiwan was chosen as the site for two test labs for certifying that equipment conforms with world standards. In July 2007, the National Communications Commission awarded the first regional licenses for WiMAX broadband wireless access services to six local operators. According to the Market Intelligence Consulting Institute, a division of the Institute for Information Industry (jointly supported by private-sector and government funding), Taiwan’s revenues from WiMAX equipment production could reach NT$100 billion (US$3.17 billion) by 2010.

Through the nationwide installation of wireless broadband Internet facilities, a wireless superhighway will soon be established that will enable people even in the most remote areas to connect with the world at will and educate themselves on any topic under the sun.