Boston, MA -- (ReleaseWire) -- 01/29/2014 -- BMI View: The lack of growth in Q313 indicates that recovery in Taiwan's construction activity is proceeding slower than previously expected, prompting us to revise down our full-year growth projections for 2013 from 2.0% to 1.1%. Looking at 2014, we are concerned that the structural deficiencies within the Chinese economy and the municipal elections in Taiwan could hamper construction activity. Given this unfavourable investment climate, we have revised down Taiwan's construction growth forecasts for 2014, with real growth for the sector expected to reach 1.9% (previously 2.9%). Over the long-term, we expect Taiwan's construction sector to outperform its 10-year historical average, though we remain concerned about Taiwan's demographic profile and its lack of progress in achieving greater innovation in the tech sector and greater economic integration with China.
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Key developments that will affect growth include:
- In September 2013, Taipei's Department of Rapid Transit Systems announced that it had reviewed the contractual conditions for the Taipei Twin Towers project and will start negotiating a new contract with BES after Taipei Mayor Hau Lung-bin approves the review. The department was expected to start bidding procedures for the project with BES in the same month.
- In September 2013, Taipei High Administrative Court had decided to reject an environmental impact assessment (EIA) for the proposed Tamsui-Taipei expressway project. The proposed 4.7km, TWD4.6bn expressway will connect Highway No. 2 in Tamsui, in New Taipei City, and the intersection of Dadu Road and Zhongyang N Road in Taipei City.
- In September 2013, Taiwan-based Taoyuan International Airport Corporation revealed that the runway renovation project of Taiwan Taoyuan International Airport has been delayed due to lack of bidders for the project. The renovation, which was scheduled to be completed by end-2015, has been delayed due to issues pertaining to construction methods. TIAC began the reinforcement work on the airport's north runway in May 2013, while the main construction work on the north runway is scheduled to start in 2014. Meanwhile, the renovation of the south runway is stalled, as TIAC failed to attract bidders. However, TIAC was scheduled to hold another bidding session in the week ending September 14 2013.
- In November 2013, Nippon Yusen Kaisha (NYK) and Nippon Container Terminals, owned by NYK Group and Mitsubishi Logistics, acquired a 12.5 % stake in Kao Ming Container Terminal (KMCT). KMCT is owned by Taiwanese shipping company Yang Ming and owns the 50-year BOT concession for the Kaohsiung Intercontinental Container Terminal, located at Port of Kaohsiung. The terminal, which is envisaged to have four berths, is expected to be fully completed in September 2014, with the first phase operational since January 2011.
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