Along with the development of economy, the rapid growth on transportation needs and increasing values of time has led the trend to construct high-speed rails in many countries worldwide. In Taiwan, the mileage between major cities is all within 400 kilometers. When various transport systems appear to be saturated, it is the best time to develop the high-speed transport system. As a result, our government has started aggressively to promote the High Speed Rail Project.

The line of Taiwan HSR is about 350 km in length with 12 stations along it, including Nangang, Taipei, Bangiao, Taoyuan, Hsinchu, Miaoli, Taichung, Changhua, Yunlin, Chiayi, Tainan and Kaohsiung. The average distance between these stations is about 32 km. Three stabling yards are established in Hsichih (汐止, Taipei), Wujih (烏日, Taichung) and Tsoying (左營, Kaohsiung) for trains overnight parking, cleaning and preparation. In addition, a main workshop is set up in Yentsao (燕巢, Kaohsiung); a depot is built in Hsichih and two civil/electrical engineering maintenance bases are founded in Liuchia (六家, Hsinchu) and Taipao (太保, Chiayi).

The first stage of  the operation , eight station of the high speedrail was operated in May 2, 2007, namely, Taipei, Banqiao, Taoyuan , Hsinchu, Taichung, Chiayi , Tainan, and Kaohsiung. and by 2010 four more station was open, i.e.Naugang, Miaoli, Changhua and Yunlin. The speed on HSR is designed as 350 km per hour. Trains are designed with headway of four minutes in peak hours. The travel time is 90 minutes from Taipei to Kaohsiung, shortening 150 minutes. It is about one third or one fourth of the time needed by the existing narrow-gauge railway trains or the highway- running cars. Each HSR train has 989 seats and the line has a capacity of 300,000 seats per day, making its traffic capacity 30 times the air transportation, 4 times the narrow-gauge railway and 2.5 times the freeway.

The HSR has turned out to be the key mode of transportation in the Taiwan western corridor. It will also connect with the metropolitan MRT systems and the existing railway to shape a high-efficiency rail transit network, and to restrain the growth of private car ownership, and alleviate traffic congestion in highways and parking problems in urban areas.

Taiwan government encouraged private enterprises to participate this project in BOT mode. As a result, the Taiwan High Speed Rail Corporation (THSRC) signed the Taiwan High Speed Rail Construction and Operation Contract and Station Area Development Contract with Ministry of Transportation and Communications (MOTC) on July 23, 1998. The THSRC was thus officially authorized with a 35-year concession of HSR construction and operation and a 50-year concession of station specific zone developments. For financial arrangement, MOTC and THSRC agree to extend the concession of HSR construction and operation to 70 years and stop the concession of station specific zone development ,in July 27, 2015. 

The project was estimated to cost $16.5 billion U.S. dollars. The items committed by the government will cost $3.4 billion U.S. dollars accounting for 20.6% of the total cost. Private investment will be $13.1 billion U.S. dollars accounting for 79.4% of the total cost. Items committed by the government include land acquisition, planning, design, supervision and civil work for understructures in Taipei sections. Private investment includes civil works, stations, track work, electrical and mechanical system, maintenance bases, and financial cost. To share the benefits with government, the THSRC promises to appropriate parts of yearly earnings to government for HSR further development and construction.