The Regulations are prescribed pursuant to Article 10, Paragraph 2 of Commercial Port Law.

Various commercial port facilities provided for state-run or private enterprises to invest and build , or lease to operate (hereinafter referred to as “Investment and Operation”), Commercial Port Administrative Authority (hereinafter referred to as “Administrative Authority”) may plan to operate on their own or by means of applying via state-run or private enterprises.
The Administrative Authority may handle businesses listed in preceding paragraph with considerations of development needs on commercial ports or different case nature when adopting the following evaluation methods:
1. “Comprehensive evaluation” refers to the method that Administrative Authority stipulates the related matters on basis of evaluation criteria, benchmarks, and weighing scales, when selecting state-run or private enterprises for Investment and Operation of commercial port facilities with transparent procedures.
2. “Sole item for evaluation” refers to the method that Administrative Authority stipulates the evaluation criteria and benchmarks when selecting state-run or private enterprises for Investment and Operation of commercial port facilities with transparent procedures.
3. “Direct review” refers to a method, meeting circumstances described in Article 7, of which Administrative Authority may select state-run or private enterprises for Investment and Operation of commercial port facilities without transparent procedures.

Provided full or partial objectives which the state-run or private enterprises applied on basis of Investment and Operation meet any of the following circumstances, the Administrative Authority may refuse to accept such applications and notify the applicants in writing:
1. The Administrative Authority has previously planned such project.
2. The application does not comply with the development plan of the commercial port area.
3. The application does not comply with related laws and regulations.
Administrative Authority may, after state-run or private enterprises submitted their applications, evaluate whether they have met the criteria and needs of operation development of the commercial ports. Once such evaluation standards were met, Administrative Authority may handle such matter by reference to applications submitted by the state-run or private enterprises, and therefore determine the method to be used before notifying the applicants in writing.

Where Administrative Authority selectively adopt the Comprehensive evaluation or Sole item for evaluation, should publicize the procurement procedure. The content should at least includes suppliers’ qualifications, items and benchmarks of Comprehensive evaluation or Sole item for evaluation, competition process, duration of contract, and the required documentations.
The Administrative Authority should scrutinize the qualification of applications and review the related documents from the Investment and Operation applicants by means of Comprehensive evaluation or Sole item evaluation, and notifies the applicants of such results in writing.
The Administrative Authority may organize an evaluation team to exclusively handle the Comprehensive evaluation or Sole item evaluation.

Comprehensive evaluation details should at least include the following items:
1. Related operation performance or operation philosophy.
2. Investment and Operation plan document that contains:
(1) Constructional feasibility with the exception of lease for operation.
(2) Operational feasibility.
(3) Financial feasibility.
(4) Legal feasibility.
(5) Other required evaluation items as determined by the Administrative Authority.
3. Whether the Investment and Operation plan details described in the preceding subparagraph contribute to the whole benefit of commercial port operation and management.

The state-run or private enterprises which met the evaluation benchmarks under Comprehensive evaluation or Sole item evaluation and won the better place in the overall competition have the priority to contract negotiations with the Administrative Authority.
According to preceding paragraph, the state-run or private enterprises which enjoy the priority to contract negotiations shall report their Investment and Operation plan documents to the Administration Authority; with the Administration Authority’s grant, such enterprises may then proceed with contract negotiations with the Administration Authority on publicized and allowable issues.
The state-run or private enterprises should complete contracts with the Administration Authority within the required and publicized period. If such enterprises fail to abide by the time period limitation, their priority to negotiate would cease, and the Administration Authority may fill such positions in due order from the remaining qualified enterprises list.

When the Administrative Authority handles the Investment and Operation of commercial port facilities cases for state-run or private enterprised, Direct review method may be utilized under the following circumstances:
1. In the expansion of adjacent land or facility rentals, the total expansion area does not exceed 50% of the original rental area stipulated in the initial contract.
2. Enterprises which apply to join the free trade zones for free trade zone operation purposes.
3. Office places for the need of port operation or storage room for equipments/facilities on demand.
4. The arrangement for underground pipes or cables associated with the rental land and for the need of port operations.
5. If the rental period is less than one year, and such enterprise also fails to build any facility which results in being prohibited for contract extension.
6. In cooperation with the need of government policy, port development, or harbor construction.
The enterprises which apply to join the free trade zones for free trade zone businesses under the preceding subparagraph 2, shall comply with Regulations Governing the Operation and Management of Free Trade Zones Enterprises after obtaining the right for contract negotiation.

Where state-run or private enterprises obtain the priority for contract negotiation with the Administrative Authority through Direct review method, the Administrative Authority may request state-run or private enterprises to submit the Investment and Operation plan documents depending on the nature of each case. The review related to Investment and Operation plan documents and contract negotiation with the Administrative Authority shall comply with the requirements in Article 6, paragraph 6, and sign a contract within the time period notified by the Administration Authority.
For the Direct review case under the preceding subparagraph 2, the application documents of state-run or private enterprises should at least include Investment and Operation’s letter of intent and business plan documentation in their submissions to Administration Authority for review on the following matters:
1. Investment and Operation contents.
2. Use of land or facilities items.
3. The whole development concepts and business models.
4. The investment result analysis on free trade area, and the comprehensive result of commercial port operation.
5. Related operation performance results or operation philosophy.
6. Other required evaluation items determined by the Administration Authority.
The Administrative Authority may organize an evaluation team to handle the evaluation procedure described in the two preceding paragraphs.

The state-run or private enterprises should pay rental and management fees of land or facilities and Investment and Operation items which have been recorded in the contract. The Administration Authority should compute and receive such fees from state-run or private enterprises based on designated waters.
The rental and management fee items and the standards of preceding paragraph are described as follow:
1. Rental:
(1) Land rental: Computing and receiving land royalty fees in accordance with action program. Land not concluded in accordance with such program should be computed at the rate of the declared value as its annual rental fee.
(2) Facility Rentals: Including wharf, building, facilities, and the like shall be computed at the rate of the construction cost as its annual rental fee.
2. Management fee: Depending on the nature of Investment and Operation items by state-run or private enterprises, the fee should be computed and received on basis of area rented, usage scope, operation amount, total rental described in the preceding paragraph, operation performance results, business scope, guaranteed shipping volume, and etc.

Where the ownership of commercial port facilities invested and operated by state-run or private enterprises belongs to the Administration Authority; the state-run or private enterprises may negotiate free rental period on such commercial port facilities with the Administration Authority.
The free rental period described in the preceding paragraph should be computed according to the Investment and Operation plan documents. Such calculation should be based on the accumulated value of annual cash flow of state-run or private enterprises; if it is less than one full year, it shall be computed on a pro rata basis.

The ownership of commercial port facilities invested and operated by state-run or private enterprises doesn’t belong to the Administration Authority. And in the contract the ownership of commercial port facilities should be arranged to, when terminated or expired , transfer to the Administration Authority or reverts to its original condition. These are not applicable if the termination of contract is not attributable to the state-run or private enterprises.

The Investment and Operation of commercial port facilities by state-run or private enterprises should attach related documents, license and fee certificate in accordance with contract when submitting to the Administration Authority, and they may start operation only after obtaining their permission.
Where the commercial port facilities are likely to impact the security and order of commercial port operation, the Administration Authority may request the state-run or private enterprises to submit operation inspection procedure plan and progress inspection prior to launching their operations.
Where the ownership of commercial port facilities belongs to the Administration Authority, the state-run or private enterprises should notify the Administration Authority in accordance with the contract to conduct inspection.
Where the commercial port facilities of preceding paragraph are completed and operate in stages, the inspection methods and standards of each stage should be recorded in the contract accordingly.

When the state-run or private enterprises suggest extension or apply for priority of contract negotiation in accordance with contract, the Administration Authority should at least evaluate and review the following items:
1. The payment condition of rental and management fee; maintenance, management and operation condition of Investment and Operation objects.
2. Whether there is any violatation of related laws or regulations, and its follow-up handling situations.
3. Whether there is any violation of the contract, and the actual remedy conditions.
4. Related operation performance results.

Where any of the following circumstances happens, and if the state-run or private enterprises obtain the priority for contract negotiation, the Administration Authority should notify the revocation of qualification:
1. Where fails to pay performance bond within the prescribed time limit.
2. Where fails to supplement correct Investment and Operation plan document within the prescribed time limit.
3. Where fails to sign contract within the prescribed time limit.
4. Where fails to grant preparation permit if application for free port area operation.

Where the state-run or private enterprises fail to carry out the contents agreed in the contract, the Administration Authority may, depending on the degree of violation, adopt one or more of the following methods:
1. To set up a limited period of time for the enterprises to make improvements.
2. To compute and receive punitive fees from the enterprises.
3. To claims for damages from the enterprises.
4. To terminate part of or the whole Investment and Operation matters.
5. To terminate contract.
Where any of the following circumstances applies to investing or operating free trade area business of commercial port facilities, the Administration Authority may terminate the contract:
1. The preparation permit of free trade area business or business permit are revoked or operation permit has been annulled or revoked by the authority of the free port area.
2. Where enterprises fail to operate the free trade area business or the operating results do not meet the expectations prescribed in the plan, and also fail to provide adequate remedies within the required written time limit.

In the duration of an Investment and Operation contract, the Administration Authority shall negotiate and handle issues such as contract execution, incomplete matters, and controversies by means of fair and reasonable manner.
If the Administration Authority fails to complete a negotiation with the state-run or private enterprises, the controversies may be resolved by means of arbitration or litigation.

Commercial port facilities can be operated by state-run or private enterprises in the agreed upon manner of investment or rental. Its order, rental benchmark, performance management, acceptance, and controversy handlings of the selection of undertakers is to be carried out by the Maritime and Port Bureau, MOTC, the administration authority of domestic commercial ports, or the agency as designated by the Executive Yuan, and should be regulated by this Regulation mutatis mutandis.

Where the state-run or private enterprises had signed the Investment and Operation contract with the Administration Authority before the enforcement of this Regulation, any issues should be handled in accordance with the contents of the original contract ; this Regulation shall not apply.

This Regulation shall come into force from the date of its promulgation.

(The Chinese text is the only authentic text which shall be given priority if there is discrepancy between the Chinese text and this translation version)