VZCZCXYZ0001
RR RUEHWEB

DE RUEHIN #1090 0890823
ZNR UUUUU ZZH
R 300823Z MAR 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 9421
INFO RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUCPDOC/USDOC WAQC
RUEHBJ/AMEMBASSY BEIJING 4983
RUEHGZ/AMCONSUL GUANGZHOU 9164
RUESLE/AMCONSUL SHANGHAI 8553
RUEHSH/AMCONSUL SHENYANG 5095
RUEHHK/AMCONSUL HONG KONG 6178
RUEHGP/AMEMBASSY SINGAPORE 6408
RUEHUL/AMEMBASSY SEOUL 7714
RUEHML/AMEMBASSY MANILA 9699
RUEHKO/AMEMBASSY TOKYO 7576

UNCLAS AIT TAIPEI 001090 
 
SIPDIS 
 
SIPDIS 
 
DEPT PASS AIT/W, USTR, AND FMC 
DEPT FOR EAP/RSP/TC AND EB/TRA 
USDOC FOR 4330/ITA/MAC 
 
FROM AIT KAOHSIUNG BRANCH OFFICE 
 
E.O. 12958:N/A 
TAGS: EWWT ETRD ECON TW
SUBJECT: Port of Kaohsiung Resumes Work on Tender for the 
Sixth Container Terminal Project 
 
Ref:  A) Taipei 0142 B) 05 Taipei 4305 C) 05 Taipei 3393 
 
¶1.  Kaohsiung Harbor Bureau (KHB) recently resumed 
preparing a tender for construction of Kaohsiung's Sixth 
Container Terminal project, which had been suspended for 
nearly four months.  KHB had originally planned to begin 
tendering invitations to prospective investors in October 
2005 (Ref B), but it suspended the project's initial 
preparations because Taiwan's Legislature became suspicious 
of the inefficiencies of Build-Operate-Transfer (BOT) 
projects and decided to place a moratorium on all BOT 
projects, of which Kaohsiung's Sixth Container Terminal was 
one. (Ref C) 
 
¶2.  Ma Chien-kang, Deputy Chief of KHB's Business 
Development Section, told AIT/K that his office recently 
learned that the central government's approximately USD62 
million subsidy for the project already passed the 
Legislative Yuan.  Ma noted that the subsidy will be spent 
on infrastructure improvement at the construction site. 
This improvement will include construction of four wharfs, 
container yards, and container handling facilities.  On 
February 10, 2006, KHB resumed work on the tender by 
publishing details of the project and a bidding invitation 
in local newspapers and on the KHB website. 
 
¶3.  According to Ma, who is the responsible official for 
the project, KHB plans to review and evaluate the 
applications between September 24 and December 24, 2006, 
and hopes to sign the contract with the successful bidder(s) 
in January 2007. KHB hopes that the construction of four 
berths can begin by June 2007 and that the berths can begin 
to operate as scheduled by 2010. 
 
¶4.  KHB officials acknowledge that more leading shipping 
carriers are using larger container vessels for their 
businesses.  The larger vessels are usually capable of 
carrying up to 10,000 TEU containers.  However, the Port's 
existing facilities are limited only to handling 8,000-TEU 
vessels.  KHB officials hope that the new container 
terminal will become capable of handling larger vessels, 
thus effectively keeping the many world level shipping 
carriers currently operating in Kaohsiung from leaving. 
Alice Liu, KHB's Business Division Director, confirmed the 
recent news account that Kaohsiung Harbor had experienced a 
continuing drop in container traffic in January and 
February 2006 following its first ever setback in freight 
handling in 2005. (Ref A)  Liu noted that in the first two 
months of 2006 the Port handled 0.23  less containers from 
the same period a year ago.  The transshipment containers 
coming through the direct shipping connecting Kaohsiung to 
the PRC ports of Fuzhou and Xiamen, also showed a drop of 
12.62  from the same period of time in the previous year. 
Liu admitted that construction of the new terminal may be 
delayed but that without the new facilities the Port of 
Kaohsiung very likely may face further marginalization when 
the major shipping carriers all decide to move their 
businesses to China. 
 
 
Thiele 
 
Young