The government will do its best to maintain the smooth operation of the country's high-speed rail system, but the company responsible for the line will retain control of day-to-day operations, government officials said Monday. Presidential Office spokesman Wang Yu-chi said that senior officials of the Presidential Office, the Executive Yuan and the ruling Kuomintang had discussed the struggling railway system at a recent regular meeting amid reports that the government will take over the debt-ridden Taiwan High Speed Rail Corp. (THSRC). THSRC, a private company that built the 345-kilometer railway, has operated the line under a build-operate-transfer (BOT) contract with the government. Premier Wu Den-yih was quoted as having said in the meeting that the high-speed rail system, which shortens travel between Taipei in the north and Kaohsiung in the south to 90 minutes, should never be allowed to fall through and should keep running normally. 'All other officials present at the meeting, including President Ma Ying-jeou, agreed to Wu's view, ' Wang said. 'They unanimously agree that the government should keep the system running smoothly in a responsible manner.' Earlier in the day, Premier Wu paid a visit to the Legisaltive Yuan to brief lawmakers from across the party spectrum on the government's stance on the high- speed railway's fate. 'The government's stance is clear that the rail system should remain operational,' Wu told lawmakers. THSRC's financial woes grew more precarious recently after the company's original shareholders expressed reluctance to pump any more money into the money-losing company, an attitude that has prompted creditor banks to refuse to offer any new loans to help ease the company's financial crunch. In the face of this awkward situation, Wu said, the government still has to figure out a way to maintain the rail system's normal operations and financial viability. He reiterated the government's stance of 'no takeover and no increase of its investment in the company.' Instead, the premier said, the government will play a leading role in charting the company's operational direction to improve its financial status. Wu said THSRC's monthly revenues exceed its operating costs, so it runs a small operating profit. 'But the surplus has been more than offset by its heavy burden of interest payments, depreciation and amortization, ' Wu said, adding that high interest payments and amorization have been the main cause of the company's heavy indebtedness. According to Wu, the government's involvement in a supervisory role could help persuade creditor banks to offer new loans at lower interest rates to keep the company afloat. 'That is the first step in resolving the THSRC's financial woes and the next step will be improving its depreciation and amortization issues, ' Wu said. The government and several state-owned companies and organizations have stakes in the company, and Wu said the government has an interest in seeing the high-speed rail system operate smoothly with sound financing. Earlier in the day, Minister of Transportation and Communications Mao Chih-kuo rebutted media descriptions of government involvement in THSRC operations as an indication that the country's biggest BOT project had failed. Mao stressed that the government has no plan to take over the company, saying it only intended to get a majority of seats on the company's board of directors in accordance with the Company Act so that it can play a leading role in steering the company's future course. 'The government and THSRC will remain partners as the BOT's basic principle lies in a partnership between the private operator and the government, ' Mao explained. He said the THSRC will remain the rail system's operating body and that the spirit of the BOT contract between the two parties will remain intact. The high-speed rail company is scheduled to convene an extraordinary board meeting Tuesday to set a date for an extraordinary shareholders' meeting. Corporate sources said that the meeting agenda does not list any personnel change proposals, but other sources said that THSRC Chairwoman Nita Ing will offer to resign at the meeting. If Ing resigns, the sources said, the government may arrange for THSRC CEO Ou Chin-der to first gain a seat on the board and then have him elected board chairman. Ou, a former deputy mayor of Taipei who is widely believed to be one of President Ma's trusted friends, is not a board member at the moment. Of the 14 seats on the THSRC board, two are held by independent directors and four are filled by representatives of fully or partially government-controlled organizations -- Taiwan Sugar Corp., the CTCI Foundation, the China Aviation Development Foundation and China Steel Corp. THSRC has paid-in capital of NT$105.3 billion (US$3.23 billion) but its accumulated losses had reached NT$70.2 billion as of the end of June this year, or about two-thirds of its capital. The company informed the Ministry of Transportation and Communications (MOTC) of its financial woes in February. After discussions with the Executive Yuan, the MOTC agreed to assist the company in resolving its financial difficulties by seeking new bank loans. However, media reports said, creditor banks were reluctant to approve new loans unless the THSRC's five original shareholders injected more capital. According to the reports, if Ou replaces Ing as the company's new chairman, the government will endorse the new loans. Citing unidentified banking sources, the reports said Ing has agreed to resign and let the government take over the company, after discussions with creditor banks. 