Taiwan is home to a vibrant domestic infrastructure sector amid efforts to move towards a more liberalised business regime since the economy's membership of the World Trade Organisation (WTO) in 2002. The five-year construction plan (2003-2008) is nearing completion and has been significantly responsible for much of the growth witnessed in Taiwan's construction industry over its coverage period. Moreover, with an approved budget of TWD205.5bn (US$6.32bn) for public construction in the current year, this spurt is likely to continue. This report forecasts the Taiwanese construction industry to grow at an average of 2.91% over the 2008-2012 period.
Transport-related infrastructure has seen maximum activity, with around US$18bn having been spent on the ongoing Municipal Rapid Transit (MRT) project in Taipei and surrounding regions over the past few years. The government's procurement agreement, aimed at opening up the domestic construction market to greater foreign participation, is expected to do away with the paucity of foreign contractors that had been attributed to entry barriers in the form of restricted bidding procedures and complex professional licensing arrangements. Furthermore, the industry is expected to get a boost from the six-year Challenge 2008 Development Programme, which involves an investment of about US$75bn for the construction of new research facilities and infrastructure.
However, Taiwan's construction industry faces its share of challenges in the form of labour shortages, lack of transport links with China and heavy concentration, with the top 25 contractors controlling nearly 80% of the industry. There is also a need to expedite the dispute settlement process to prevent foreign investors from losing interest in Taiwan. Furthermore, with severa ...