Taipei (The China Post/ANN) - Mainland Chinese businesses have expressed interest in a Xinyi District land parcel that will be developed based on the build-operate-transfer (BOT) model, said Chiu Ta-chan, head of the Taipei City Finance Department, yesterday.
Three to four Chinese companies have inquired about the development, he said during a ceremony yesterday in which the city signed a major deal with Nan Shan Life.
The land parcel, designated "A25" near the CPC Building in the bustling Xinyi District, is to be developed based on the BOT model, under which the private developer is to build and manage the property and then transfer it to the government after a certain period.
On top of the block, the city hopes to see a building that can either be a mall, an office tower or a hotel, Chiu said.
The block has an area of over 5,000 pings and is currently a parking lot. The base price has yet to be announced and is estimated to be over NT$20 billion (US$684 million), he said, adding that 40 to 50 companies have already made inquiries. Of these companies, three to four have Chinese capital. Insurance firms have also expressed interest in the deal, he said.
However, various limitations in current law regulating BOT projects may make it difficult for insurance firms to participate in the bidding process, he said.
According to Chiu, the city hopes to officially announce the bidding notice by the end of the year and complete the bidding process by the second quarter of next year. The developmental project is expected to create some 9,000 jobs, he said.
Redeveloping TWTC Hall 2
During yesterday's event, the city signed a contract with Nan Shan Life, which now has development rights over several land parcels currently occupied by Taipei World Trade Center Exhibition Hall Two.
Nan Shan won development rights at the price of NT$26.888 billion (US$919 million).
The lot has a total area of 5,357 pings and is located between Songzhi Road and Songren Road in Xinyi District, right next to the Taipei 101 building.
According to Taipei City, the deal is expected to attract private investment worth NT$40 billion (US$1.4 billion) and to create 9,200 jobs. Across the 50-year period during which the rights are valid, the city can receive rent of NT$220 million (US$7.5 million) each year, as the central government gets a boost from property, business and sales tax revenue, the city said.
At the ceremony, Nan Shan vice chairman Tu Ying-tsung pointed out the global economy is expected to turn around in 2015.
He based his prediction on the fact that Ben Bernanke, chairman of the U.S. Federal Reserve, will extend America's low-rate environment all the way to 2015.
Yet he said for Taiwan, a recovery will take place sooner. "Taiwan's economy is expected to grow some one percent this year, and growth should be higher next year," he said.