2nd statement on Taiwan high speed rail link

This decision was made despite the fact that
THSRC has a binding agreement to enter into a supply contract
with EUROTRAIN. EUROTRAIN played a major role in the formation of
the Taiwan High Speed Rail Consortium and its proposals for the
supply of the Core System formed an essential part of the winning
bid made by THSRC in 1997 in competition with the Japanese
system. THSRC has chosen to negotiate with TSC despite stating
publicly that the EUROTRAIN proposal was competitive. EUROTRAIN
believes that this action is in conflict with the agreement with
THSRC and the original intention of the parties.

In the light of the above, EUROTRAIN has filed an application
for a Provisional Injunction with the Taipei District Court to
prevent THSRC and the original five Taiwanese shareholders or
their affiliates from negotiating or concluding a contract with
TSC.

EUROTRAIN is offering a proven system which is
compliant with both BOTHSR (Taiwan Ministry of Transport) and
THSRC specifications. The train offered was tested in the
presence of the Consortium members, BOTHSR and the media in
Germany on May 4th, 1998 to their complete satisfaction. The
other elements of the system including the safety critical
signalling system are already proven in service. In contrast with
the above, the Japanese train has not yet been tested.

Equally important,
TSC is offering a signalling concept which is
fundamentally different to that employed in Japan and which has
yet to be designed, tested and approved. Such a process may be
expected to take several years. This raises serious doubts
regarding the acceptability of what is an unproven system. Not
only is the Japanese system unproven but also its adoption would
almost certainly impact on the overall construction schedule and
result in a significant delay to the 2005 opening date.

The above issues raise serious questions regarding the
information and recommendations placed before the THSRC
Board.

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Press contact:
Helen Connolly

Tel. +33 (0)1 41 66 91 43

helen.connolly@transport.alstom.com