The Executive Yuan's recent approval of a NT$352.1 billion plan to extend Taiwan's high-speed rail (HSR) network to Yilan — and its broader endorsement of an island-wide "four 90-minute rail corridors" initiative — tells experienced observers something immediately: an election is coming.
Major infrastructure announcements have long functioned as electoral currency in Taiwan, available exclusively to the party in power. Only the ruling party controls the agenda for approving such projects, and only the ruling party reaps the political dividend when the announcement drops. The Democratic Progressive Party (DPP) government's decision to formally greenlight the Yilan extension now — at a cost that has ballooned from an initial NT$99.5 billion six years ago to NT$352.1 billion today — fits a pattern that stretches back decades.
During the Lee Teng-hui (李登輝) era, the freeway linking Taipei and Yilan was announced before elections without adequate planning, driven by the political imperative to "win back Yilan." Under President Chen Shui-bian (陳水扁), two airports were built in Pingtung County — one at Pingtung City, one at Hengchun — to serve the tourist corridor to Kenting. Both became textbook cases of politically motivated infrastructure: actual passenger volumes fell below 20 percent of projections, facility utilization rates dropped below 10 percent, and both eventually ceased operations, earning their place in Taiwan's catalogue of "mosquito airports" — white-elephant facilities that stand empty. Under Presidents Tsai Ing-wen (蔡英文) and Lai Ching-te (賴清德), HSR extensions to both Pingtung and Yilan have made repeated pre-election appearances. This week, the Yilan extension graduated from campaign prop to formally approved policy.
NT$352.1 Billion Is a Floor, Not a Ceiling
The NT$352.1 billion figure approved by the Executive Yuan should be understood as a starting point. Taiwan's track record on major infrastructure projects is consistent: costs rise significantly between initial proposal, formal approval, and construction. The Yilan HSR extension is unlikely to be an exception. When the Control Yuan's estimates of operating costs are added, along with what the Taiwan Railways labor union has calculated as roughly 30 years of suppressed fare revenue on competing rail lines — a form of hidden cost — the total outlay could approach or exceed NT$600 billion by some critics' projections. Even by more conservative estimates, the final bill will substantially exceed the approved figure.
The government's headline selling point is that the new line would cut travel time from Nangang Station in Taipei to Yilan to approximately 20 minutes, compared to 48 to 56 minutes on existing express rail services. That sounds compelling in isolation. But the more consequential question — one the government has been conspicuously reluctant to answer — is how many people would actually use it, and on what terms.
The Demand Problem the Government Won't Talk About
The traffic bottleneck between Taipei and Yilan is not a daily commuter problem. It is a holiday tourism problem. Anyone who has sat in a traffic jam on the Taipei-Yilan Freeway on a long weekend, or tried to buy a train ticket to Yilan before a public holiday, knows exactly what the corridor looks like under peak demand. But that peak is episodic, not structural. On ordinary weekdays, demand between Taipei and Yilan does not come close to justifying high-speed rail capacity.
This has a direct consequence for the project's economics. The government's own self-repayment ratio — the share of costs recovered through fare revenue — is officially estimated at just 6 to 7 percent. That figure is almost certainly optimistic; official projections for politically driven infrastructure in Taiwan have a documented tendency toward favorable assumptions. A self-repayment ratio in the single digits means that fare revenue will not cover operating costs, let alone repay the capital investment. The project would require sustained public subsidy from the moment it opens.
Nor would the line solve the holiday congestion it is ostensibly designed to address. Many tourists traveling to Yilan and Hualien drive because they need their vehicles to move around once they arrive. The government's own estimates suggest the HSR extension would reduce holiday passenger car volumes on the Taipei-Yilan Freeway by roughly 15 percent. That is a modest easing, not a solution — and it comes at extraordinary cost.
The Hengchun Airport Precedent
The Hengchun Airport case is worth examining in detail, because it illustrates precisely how this cycle works. The Chen administration framed the airport around an appealing vision: travelers flying from Taipei to the Kenting coast in 90 minutes, bypassing the notorious holiday traffic on the road to Taiwan's southernmost tip. The Ministry of Transportation, tasked with evaluating the project's viability, duly concluded that it offered "positive benefits" and was "feasible under government policy, economic benefit, social need, and substantive conditions." The assessment was as favorable as the political pressure required it to be.
The outcome was a disaster. Real passenger volumes never exceeded 20 percent of projections. Facility utilization rates fell below 10 percent and continued to decline as external conditions changed. The airport eventually suspended all scheduled services and now stands as one of Taiwan's most cited examples of infrastructure built for political rather than economic reasons.
The Yilan HSR extension — and, in all likelihood, the proposed Pingtung extension as well — shares the same structural features: demand that cannot sustain the capacity, costs that cannot be recovered through operations, and a political timeline that preceded any serious economic justification.
Island-Wide HSR: Vision Without Viability
The broader "four 90-minute rail corridors" framework — encompassing the Yilan and Pingtung HSR extensions, double-tracking and electrification of the Hualien-Taitung line, and upgrades to the South-Link Railway — carries the same concerns at larger scale. Each component faces questions of insufficient demand, high capital costs, and political motivation that outweighs economic rationale.
Politicians have always used infrastructure announcements for electoral purposes, and they always will. That is a given of democratic politics. But there is a line between politically timed announcements and fiscally irresponsible commitments. Approving projects that lack basic economic viability — and then actually spending the money — causes lasting damage. It diverts budgetary resources away from genuine public needs, weakens the fiscal position of the state, and leaves future governments and taxpayers to manage the consequences.
The DPP government is entitled to ask whether this is the legacy it intends to build. The NT$352.1 billion Yilan HSR approval suggests it has not seriously asked that question yet.
Taiwan's infrastructure budget is finite. Committing it to projects with 6 to 7 percent self-repayment ratios and holiday-only demand profiles is not visionary transportation policy. It is a transfer of public resources from future needs to present electoral calculations — and the Hengchun Airport is standing by to remind anyone who has forgotten how that tends to end.
