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Hsuehshan Tunnel (III): Uneven economic benefits

2016/08/31 21:23:12

By Kuo Chung-han CNA Staff writer

Ten years after the Hsuehshan Tunnel on National Freeway No. 5 opened in June 2006, shortening the commute between Taipei and Yilan County, the two regions have been brought closer together, but Yilan's economy has not received the bump many expected.

The thought was that by cutting travel time between Taiwan's capital and commercial hub and the less developed rural county, Yilan would not only see a major rise in tourism but also more industrial development by serving as an extension of Taipei.

That has not happened, at least when seen through the prism of the Yilan Science Park, a 70-hectare rectangular lot near the Yilan County government that was expected to push the industrial advancement of the northeastern Taiwan county.

The science park, planned in 2005, was intended to attract investment from low-pollution, high added-value sectors, such as telecommunications knowledge-based sectors, digital content-related software businesses, and innovative and R&D-based sectors.

Recruiting companies to the park was difficult initially because the Hsinchu Science Park Bureau, which administers the Yilan Science Park, would not allow any type of mass production there, but after several environmental impact assessments, it decided to permit "trial production."

Only nine companies have had their applications to set up shop in the park approved to date, and the first operating facility was completed in May.

Finally having an active tenant was considered a milestone for the science park, which was an airstrip used by Japanese kamikaze suicide attack airplanes at the end of the Second World War in the mid-1940s.

It also pointed to the fact, however, that the opening of the 12.9-kilometer Hsuehshan Tunnel alone and cutting travel time between Taipei and Yilan from two hours to just 40 minutes can only provide a limited economic boost if other conditions are not in place.

Omni Calibration Laboratory Ltd. was the first company to invest in the science park, and it was unaffected by the park's position on mass production because it mainly calibrates and tests lab devices and equipment.

But its general manager, Lo Chien-sheng (羅建盛), felt that the county and many other local governments still do not understand what economic competitiveness really means.

For example, property taxes levied by local governments are unreasonably high in some counties and cities, and especially high in Yilan, Lo said.

Yilan also has higher environmental standards compared with other parts of Taiwan, making it harder to attract potential investors.

Even after allowing trial production, the mass production limitations loom large on many investors' minds, said Lee Shou-cheng (李守正), the head of the Yilan Industrial Development and Investment Promotion Committee and former chief of Yilan's Planning Department.

"We're willing to move in if mass production is allowed. If it's not, then we're not interested," is the message Lee told CNA he is hearing from many entrepreneurs.

Lee said mass production is not a problem to the county government if companies can adhere to the county's environmental standards, but the decision is ultimately made by the Hsinchu Science Park Bureau.

To further boost interest in the park, the bureau plans to give a 30 percent discount on the first three years of rent to companies that move in, but it is not sure if that will be a good enough incentive.

What's clear is that closer access to talent and funds provided by the tunnel has not been enough to give the park momentum, but tourism has in fact received a major boost from the more direct transportation link.

According to tax statistics, the revenue of hotels in Yilan County was 31 percent higher in July and August of 2006 after the tunnel opened than it was in the same two months the year before, and restaurant revenue was up 30 percent during the same period.

Meanwhile, Yilan has the highest concentration of leisure farms with 14 of any city or county in Taiwan and is also home to many bed and breakfasts (B&B) and tourism factories, said Luke Lee (李欣龍), head of the Creative Industry Center at Chinese Culture University, in 2015.

The number of B&Bs in Yilan grew from 219 in June of 2006 to 669 in November of 2012, to rank second in the country behind neighboring Hualien County, according to statistics of the Tourism Bureau.

The strong growth in Yilan's overall tourism sector has been supported in part by the Hsuehshan Tunnel, and Lee believes Yilan is becoming a "learning-oriented green creative city."

If that's the case, then the Hsuehshan Tunnel may have fulfilled its function by bringing the population center of greater Taipei closer.

But if the northeastern county hopes to go beyond that and get a larger share of the knowledge-based economy pie, it will need to rely on more than just the advantage provided by the tunnel.