Taiwan BOT Projects Survey: Still too Early to Partner?

By Angela Wu, Yangming Partners, Taipei

In the past few years, Taiwan has introduced new policies and laws to attract more private foreign investors and contractors to take part in the island¡¦s infrastructure developments.  The most important law is the Law for Promotion of Private Participation in Infrastructure Projects (the BOT Law), which was promulgated in February 2000.  It is important for foreign contractors to understand the BOT Law and its requirements, especially the tendering system and the risk-sharing scheme for infrastructure projects in Taiwan, in order to secure contracts and adequately manage risk. Numerous regulations and working rules have already been implemented to facilitate the application of the BOT Law.  These regulations set forth detailed guidelines on various subjects including incentives for private enterprise to lease public land, the scope of public infrastructure covered by the BOT Law, tax incentives for private enterprise participating in BOT projects, custom duties exemption or deferral on materials used for BOT projects, and dispute resolution mechanisms.

The BOT Law applies to infrastructure projects that are for public use or for the promotion of the public interest, including the following:

•     transportation facilities and common conduit;
•     environmental pollution prevention facilities;
•     sewage lines and water supply facilities;
•     hydraulic facilities;
•     sanitation and medical facilities;
•     social welfare facilities and labour welfare facilities;
•     power facilities and public gas and fuel supply facilities;
•     sports and parks facilities;
•     major industrial, commercial and hi-tech facilities;
•     development of new towns; 
•     agricultural facilities;
•     cultural and educational facilities; and
•     major tourism facilities. 

The BOT Law covers all projects that are in the form of public-private partnerships, including the following.