A Study on Supervision and Evaluation Mechanism of Mass Rapid Transit Financing Planning

• Main Authors: Cheng, Chun Fang, 鄭淳方
• Other Authors: 賴宗裕
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/67486881181014262563

碩士 === 國立政治大學 === 地政學系碩士在職專班 === 103 === Currently, government is facing financial difficulty on all levels and is short of public funds for public works. Local governments are looking forward to the construction of MRT facilities. However, the costs of these are very high. Referencing the tax increment financing (TIF) system in the U.S., the National Development Council approved the “Project for Cross-Field Value-Adding in Public Works Financial Planning,” which is widely used for the allocation of the MRT construction funds. By combining innovative financial resources and a “self-liquidation ratio” mechanism, local governments are encouraged to make financial efforts to overcome the failure to internalize the external benefits of early construction. Central and local governments share the MRT construction funds based on the self-liquidation ratio. In the present study, we summarized the literature related to self-liquidating public works and found that during the process of reviewing MRT construction plans, in order to reduce the financial burden and increase the self-liquidation ratio of local governments. However, to seek approval for their plans, local governments beautify their financial indicators, resulting in a moral hazard in finance. By analyzing disputes in the U.S., we found that this system implies moral crises and financial exclusion. Control measures on related issues are inadequate. When borrowing related systems from the U.S., the Taiwanese government should pay special attention to their shortcomings. Neither the current domestic system nor related research has proposed appropriate measures to supervise and evaluate self-liquidation funds during MRT construction and operation. According to the theory of fiscal decentralization, self-liquidating funds for MRT construction can be supervised and evaluated as per the framework of growth control quotas. After analyzing subsequent settlements of disputes on supervision and evaluation mechanisms in the U.S. and summarizing practices related to these mechanisms in the state of Iowa, we found that the state has diverse supervision and evaluation measures, which not only clearly stipulate the disclosure of project information, but also set limitations for the scope of applying the system. This can be used as a reference for the Taiwanese government to handle the moral hazard and financial exclusion of the supervision and evaluation system. However, the systems in the U.S. and the “Project for Cross-Field Value-Adding in Public Works Financial Planning” in Taiwan are not entirely the same. To design an appropriate supervision and evaluation system for Taiwan, those who had participated in the development of the plan from central and local governments as well as scholars of the domestic mass transit system were invited for focus group and individual interview. In-depth discussion on current issues was carried out. After analyzing their opinions from the interview, we found that the current situation of financial planning for MRT construction is as follows: the central government is facing the moral hazard that local governments may violate financial commitments and local governments may experience financial exclusion. Thus, the supervision and evaluation system should perform the functions of financial forecasting and information transparency. In this study, we constructed a supervision and evaluation mechanism to implement the following measures through the plan-do-check-act procedure: (1) During the reviewing phase, the central government considers the ratio of tax increment invested into the construction funds for each proposed plan according to the contribution of MRT construction while developing financial supervision and counseling principles and information disclosure principles to serve as a basis for local governments to formulate supporting measures. (2) During the construction phase, prior to granting subsidies, the central government should supervise the review of the implementation of the non-self-liquidating funds by the local governments. (3) During the operation phase, each local authority should report annually to the local Public Debt Administration Committee its earnings from self-liquidating resources and the central government should inspect the overall performances of the local governments every five years. (4) The supporting measures include the central government expanding and opening information systems for local governments and the people, implementing fiscal transparency and public accountability, and prompting the promotion of supervision and evaluation mechanism. Simultaneously, the central government may use flexible incentive strategies to encourage local governments to improve their financial performance and land appraisal systems to reflect fully the contributions of public works and to internalize the external benefits.