Metro Kaohsiung, Taiwan

In connection with the delivery of 25 3-car subway trains to the metro company of the Taiwanese city of Kaohsiung, AIL has implemented a project-specific insurance solution for Stadler to cover the risk of production and delivery interruption during the delivery period due to the occurrence of an insured risk as well as payment risks.

Kaohsiung is the second largest city in Taiwan with a population of 2.72 million. Kaohsiung’s metro system currently consists of three lines. Stadler’s delivery is part of a turnkey contract to a consortium of Stadler and two partners for the complete electromechanical system and the construction of a maintenance depot for a new fourth line.

Due to the complexity of the turnkey contract, the delivery period of six years for the metro trains is significantly longer than for similar projects where only the rolling stock is supplied. The events of the war in Ukraine and the associated sanctions against Russia have once again made it clear that risks due to geopolitical developments in cross-border trade are diverse, can change or occur at any time and are difficult to predict, especially in the long term. It is therefore important that political risks are incorporated into the project management process and managed efficiently. With the support of the Swiss Export Risk Insurance SERV, a tailor-made hedging concept was implemented for Stadler’s Kaohsiung Metro project in order to manage the long-term political risk of this project in particular.