The Committee’s 2026 recommendations reflect both continuity and urgency. Taiwan’s infrastructure and energy ambitions require policy frameworks that are transparent, predictable, and globally aligned. By completing contractual reforms, strengthening procurement practices, accelerating energy storage integration, and reinforcing regulatory institutions, Taiwan can further enhance its position as a trusted, investment-ready partner in the global infrastructure and energy landscape.

This year, our recommendations focus on several key areas: aligning Taiwan’s model contracts with international standards; improving government procurement processes; ensuring that Taiwan’s energy storage development supports the growing demand driven by AI and data centers expansion while strengthening energy resilience; and introducing incentives to encourage early completion of projects.

The Committee remains committed to working with government stakeholders to translate these recommendations into concrete actions and to monitor their outcomes.

Suggestion 1: Refine the content of model contracts for public construction projects.

The Committee reiterates the importance of ensuring that the model contracts adopted by the Public Construction Commission (PCC) reflect balanced risk allocation and are consistent with internationally recognized contracting standards. While recent dialogue with government agencies indicates growing awareness of these issues, further action will be necessary to fully restore contractual equilibrium.

1.1   Ensure that liability provisions are in line with international standards. The continued reference in multiple PCC model contracts to Article 2272 of the Civil Code remains a concern. The broad application of the Article — which deals with the ability of parties to a contract to petition to modify or terminate the original provisions in the event of unforeseen events that would make performing the contract unfair — may result in disproportionate risk transfer to contractors, legal uncertainty, and misalignment with global contracting norms. Such provisions diverge from the original legislative intent of the article and from international standards governing liability caps and exclusions.

In 2026, as Taiwan pursues increasingly complex infrastructure and energy projects, contractual clarity and fairness are essential to attract qualified domestic and international contractors. The Committee therefore recommends:

• • Removing references to Article 2272 from PCC model contracts and reinstating liability provisions consistent with international standards such as the United Kingdom’s New Engineering Contract and FIDIC frameworks.
  • Clearly defining liability caps and exclusions to reflect balanced risk sharing and legal certainty.
  • Ensuring that future amendments to model contracts are subject to structured consultation with industry stakeholders.

1.2   Restore the “in principle” approach to using model contracts. Article 63 of the draft amendment to the Government Procurement Act provides that procurement contracts should, in principle, adopt the model contract prepared by the PCC, removing the previous “in principle” qualifier. However, Taiwan’s diverse sectoral agencies operate within distinct regulatory environments and technical requirements that necessitate tailored contractual arrangements. The digital economy, particularly cloud computing, artificial intelligence, and emerging technologies, evolves at a pace that challenges traditional standardized contracting approaches.

Mandatory template adoption risks creating regulatory rigidity that may: 1) Impede agencies’ ability to procure innovative solutions aligned with sector-specific operational needs; 2) Create misalignment between standardized terms and rapidly evolving international best practices in technology procurement; and 3) Reduce Taiwan’s competitiveness in attracting leading technology providers with advanced global service models.

We therefore strongly urge retention of the “in principle” framework, preserving the existing language to maintain proportionate flexibility, with standardization upheld as the default approach.

Suggestion 2: Enhance the government procurement environment for international participation.

Despite incremental progress, structural barriers continue to limit full international participation in Taiwan’s government procurement projects. Addressing these barriers will help attract global expertise, increase competition, and improve project outcomes for large-scale infrastructure and energy development. To meet these challenges in 2026 and beyond, the Committee recommends the following targeted actions:

2.1   Extend and standardize tender preparation periods. Tender timelines for large-scale and technically complex projects should be extended and standardized to better reflect project size and associated risks. Longer preparation periods will enable more accurate pricing, reduce contingency-driven bids, and encourage value engineering and innovative delivery approaches. When contractors lack sufficient time to properly assess project risks, they often include larger contingencies to account for uncertainties. In addition, short tender periods may discourage international firms from participating, as they may lack adequate time to mobilize resources, complete internal compliance reviews, and translate procurement documents. The result is less overall competition.

Under Taiwan’s procurement regulations, procuring entities must publicly announce tenders and allow suppliers sufficient time to prepare bids. For procurements above supervision thresholds, tender notices and documentation must generally be made available several days before the bid deadline. However, this statutory minimum primarily serves as a procedural requirement and does not provide a practical preparation period for complex infrastructure projects.

In practice, tender preparation periods of approximately 30 to 45 days are common for large-scale public works projects in Taiwan, which is relatively short compared with international practice. In major infrastructure markets such as the United States and Europe, bid preparation periods for complex projects typically range from 60 to 120 days, while multilateral development-bank and public-private partnership (PPP) projects often allow 90 to 180 days. Aligning Taiwan’s tender timelines more closely with these international practices would improve pricing accuracy, encourage broader participation by international contractors, and strengthen overall project outcomes.

2.2   Institutionalize early contractor involvement. Early engagement with qualified contractors during project definition and pre-procurement stages should become standard practice for major infrastructure and energy projects. Institutionalizing early contractor involvement (ECI) mechanisms would enable the incorporation of constructability insights, risk mitigation strategies, and cost-saving solutions before the final tender issuance. Earlier collaboration serves to improve project planning, reduce downstream risks, and enhance overall project efficiency.

Many advanced procurement systems have adopted mechanisms that allow contractors to provide technical input during early project development. In the United States, project owners frequently adopt a system of two-phase, design-build procurement in which contractors are shortlisted through a qualifications-based process and then engaged to develop technical proposals in close dialogue with the owner before final bid submission. This process allows agencies to refine project scope, improve constructability, and better allocate risks before contract award.

Similarly, several European countries including the United Kingdom and the Netherlands have institutionalized early contractor involvement through procurement models such as competitive dialogue and early contractor involvement contracting, which enable structured engagement between project owners and contractors during the design and planning stages.

These approaches have been widely used for complex infrastructure projects to improve cost certainty, accelerate project delivery, and reduce disputes during construction. Adopting similar ECI mechanisms in Taiwan would help project owners benefit from industry expertise earlier in the project lifecycle, leading to more efficient procurement and better risk management.

2.3   Adopt cash-neutral payment frameworks as a default practice. Payment structures should be designed to align contractor cash inflows with project expenditures. Milestone-based payments, advance payments, and interim certification mechanisms are widely recognized international practices that reduce financing burdens on contractors, improve project cash flow, and support more competitive pricing.

In the United States, public infrastructure contracts commonly include progress payments tied to completed work milestones, allowing contractors to receive regular payments as construction progresses. Federal and state agencies often use monthly progress payment systems under standard construction contracts, ensuring that contractors are compensated promptly for completed work and materials delivered to the project site.

Similarly, many European infrastructure contracts incorporate structured payment frameworks under widely used contract standards such as FIDIC-based agreements and national public works contracts. These frameworks typically include advance payments and interim payment certificates issued periodically based on verified work progress. Such mechanisms are designed to maintain healthy project cash flow, reduce financing costs, and ensure stable project execution.

Adopting cash-neutral payment frameworks as a standard practice in Taiwan would align contractor cash flow with project expenditure and reduce financing burdens, supporting more competitive pricing.

Suggestion 3: Strengthen energy security and system resilience through stable power supply, market reform, and transparent long-term planning.

Rising electricity demand, particularly from Taiwan’s booming semiconductor and AI data center industry, makes power reliability enhancement a national priority. At the same time, Taiwan’s commitment to achieving net-zero carbon emissions by 2050 underscores the urgent need to accelerate the energy transition.

These parallel objectives, ensuring a stable power supply while transforming the energy system, require a clear, transparent, and market-oriented policy framework. Investors, developers, and energy users all depend on predictable market signals and long-term planning to support the large-scale deployment of renewable energy, energy storage, and flexible power resources. Strengthening market transparency and regulatory independence, alongside continued electricity market liberalization, will be critical to ensuring sufficient investment in these resources and reinforcing system resilience.

At the same time, Taiwan must carefully balance decarbonization goals with energy security considerations. A resilient power system requires diversified energy sources, robust infrastructure, and flexible market mechanisms that can respond to rapidly changing supply and demand conditions. The following recommendations aim to support Taiwan in building a reliable, competitive, and resilient electricity system.

3.1   Improve the fairness and transparency of the power market. A fair and transparent market design is essential to guide market participants, build investor confidence, and align stakeholder expectations.

When the Electricity Act was amended in 2025, Article 6 requiring the unbundling of generation and transmission ownership was removed. Nevertheless, current statutes still mandate that transmission enterprise — when concurrently operating generation or other businesses — must safeguard fair competition and prohibit cross-subsidization. Strict enforcement of these existing provisions to bolster the neutrality of the transmission enterprise is necessary for the cultivation of a liberalized and fair power market. Accordingly, the Committee urges the authorities to implement robust transparency mechanisms and independent oversight to ensure market integrity.

In addition, we request the regular disclosure of a comprehensive roadmap for Taiwan’s electricity market development and liberalization, including the green energy and energy storage industries, detailing installed capacities, assumptions, methodologies, current status, future plans, and annual measurable targets and timelines. The authorities should also minimize use of the “rolling-basis” policy mandate (involving frequent, short-term updates) and ensure clear and consistent policy communication to provide a long-term and predictable outlook to support market participation and reduce investment risk.

3.2   Continuously develop Taiwan’s electricity market. A transparent, competitive, and fully open electricity market is essential to enhancing system efficiency, incentivizing investment, and achieving long-term decarbonization goals. We urge the government to:

• • Fully liberalize the electricity market by expanding beyond renewables-only transactions to include the establishment of a wholesale market, spot market, and balancing market, each aligned with distinct operational timeframes to enhance overall resource utilization and market efficiency.
  • Expand the Taiwan Renewable Energy Certificate system to recognize renewable energy stored and discharged by ESS (energy storage systems), enhancing renewable-ESS integration and addressing the renewable energy surplus and mis-match issues embedded in the current mechanism.
  • Implement a flexible ancillary service market aligned with international practice, enabling demand-side flexibility based on grid conditions to improve system efficiency and resource utilization.

3.3   Strengthen energy security and system resilience. Reassess the “203050” energy roadmap (20% renewables, 30% coal, 50% liquefied natural gas) with a focus on energy security and resilience. Given Taiwan’s high exposure to imported energy resources, the government should limit any single imported energy source to a manageable level and promote a diverse power portfolio, ensuring greater energy independence and reducing risks from systemic and geopolitical disruptions.

Suggestion 4: Further align procurement contract provisions with international best practices.

Certain features of Taiwan’s current government model contracts, particularly in dispute resolution and variation payment provisions, can create uncertainty for international contractors when assessing legal risk and financial exposure. Contract frameworks that reflect widely accepted international practices can reduce uncertainty, facilitate fair risk allocation, and encourage broader participation by qualified global contractors. Unfortunately, the CPC Corporation, Taiwan, the state-owned oil company, has removed international arbitration clause from its contracts. Our recommendations:

4.1   Adopt standardized international dispute resolution mechanisms. Government model contracts should consistently provide for mediation followed by arbitration under internationally recognized frame-works, such as the International Chamber of Commerce (ICC) arbitration rules. Standardizing neutral and internationally enforceable dispute resolution mechanisms would enhance confidence among inter-national participants and reduce perceived legal risks.

Many major infrastructure markets permit international arbitration in government-related contracts. In the United States, while domestic arbitration forums are commonly used, federal agencies and public entities frequently accept arbitration clauses in large infrastructure and energy contracts, particularly in projects involving international contractors. Across the European Union, public authorities commonly allow international arbitration mechanisms in large cross-border infrastructure and PPP contracts, often referencing established frameworks such as ICC arbitration or arbitration rules of institutions such as the London Court of International Arbitration.

Similarly, jurisdictions such as the United Kingdom, Singapore, and the United Arab Emirates regularly incorporate international arbitration provisions in government infrastructure contracts, particularly for complex energy, transport, and industrial projects. These mechanisms provide neutral forums for dispute resolution and ensure that awards are enforceable internationally under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which has been adopted by more than 170 jurisdictions.

Adopting similarly standardized international arbitration provisions in all of Taiwan’s government model contracts would strengthen neutrality, improve enforceability of dispute outcomes, and increase confidence among international investors and contractors.

4.2   Codify variation payment provisions in model contracts. Government model contracts should also include clear and standardized provisions governing the valuation and payment of owner-directed variations. Contracts should establish transparent procedures for assessing variations, including defined timelines for approval, interim valuation mechanisms, and milestone-based reimbursement.

International infrastructure contracts commonly incorporate such provisions to ensure that contractors are compensated promptly for authorized changes in scope. For example, widely used international contract standards such as the FIDIC Conditions of Contract developed by the International Federation of Consulting Engineers provide structured procedures for variation instructions, valuation, and interim payment certification. Similar mechanisms are commonly incorporated into public infrastructure contracts across the United States and the European Union, where monthly progress payments and interim certification systems are standard practice.

Aligning Taiwan’s model procurement contracts with these established international practices would enable contractors to more accurately assess financial risks during the bidding stage, reduce disputes related to change orders, and improve overall project delivery outcomes. Delayed payment for owner-directed changes effectively shifts financing burdens to contractors, creating an unsustainable situation that may discourage future participation in Taiwan’s projects.