Taiwan towns see ride to riches in bullet train

TAIPEI, Jan 4 (Reuters) A high-speed rail line in Taiwan could provide some cities along its route with a ride to riches as they become less pricey alternatives to Taipei and Kaohsiung.

Friday's launch of the rail -- the world's first outside Japan based on bullet train technology -- will cut travel time between Taiwan's top two cities, Taipei in the north and Kaohsiung in the south, to about 90 minutes from up to five hours on the conventional rail service.

Trains will speed along the 345 km (214 mile) line roughly every hour, coming close to the island's major southern port and hitting eight stations in densely populated western Taiwan.

''When you launch big infrastructure projects, it usually has a positive externality for local industries,'' said Joseph Lau, an economist with Credit Suisse in Hong Kong. ''What it does is link the interior to Taipei and Kaohsiung.'' The Banciao station near Taipei is already boosting the land price, which in some places have doubled over the past few years amid plans for new luxury homes and shops.

Operators of the 13-storey FE21 shopping centre near the station hope the trains will bring more business, said Peter Lin, the mall's assistant planning department manager, and the firm is building an extension and high-rise housing in anticipation.

A bookstore inside the Banciao depot expects a 20 per cent surge in sales when the service begins, a company publicist said.

Other retailers are also looking forward to more shoppers as passenger volumes increase in the cavernous station.

SPEEDY ACCESS Some analysts say the trains could derail local retailers in the smaller cities, as excursions to Taipei and Kaohsiung for shopping also become more practical.

But further down the line, Hsinchu county -- which will become a half-hour ride from Taipei versus an hour on regular trains -- has already enticed the Winbond Electronic Corp. to build a T0 million ( million) research centre that will house 1,000 employees, said spokesman Wilson Wen.

''They won't have to give up their lifestyle in Taipei,'' he said, explaining that engineers can easily commute to the centre even from the capital.

The rail could also enliven the suburbs of Taipei and Kaohsiung by making longer-distance commutes more practical, said Peter Sutton, head of research with CLSA Asia Pacific Markets.

Former residents of the southern city of Chiayi, population 270,000, may start to return from Taipei to their more peaceful hometown after the rail provides them with easier access to the capital, said Mayor Huang Ming-hui.

''This city is a place worth living in because the education, culture and arts are all good,'' Huang said. ''This (railway) will give us some practical help.'' Chiayi and Taichung expect the high-speed trains to make day trips to famous tourist attractions in the nearby mountains.

The high-speed rail system, which has taken a decade to go online, boasts trains that can travel up to 315 kilometres per hour.

Its operator, the Taiwan High Speed Rail Corp., spent about 15 Million dollars on the system and expects 150,000 passengers per day initially.

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