Taiwan has two railway systems. The government operates a network of conventional trains called TRA (Taiwan Railways Administration) which includes expresses running from north to south and from west to east, as well as lots of short-distance commuter services. These trains are mostly electric and travel at speeds averaging at least 100 km/h. The other system is Taiwan High-Speed Railway (THSR), operated by what's officially a private consortium. However, the THSR would never have been built without heavy government backing, and it would have gone bust but for a government bail-out in late 2009 after operating for less than three years. THSR trains are much faster than TRA locomotives, usually over 250 km/h, and they make far fewer stops.
TRA operates a round-island railway system which reaches every county and special municipality on Taiwan's main island. There are no trains on the minor islands of Penghu, Kinmen etc. Typical travel times from Taipei, the capital in the north, to Kaohsiung, the major southern metropolis, for faster expresses are a shade under five hours (one-way fare is NT$843; that's about US$28 or 21 euros at current exchange rates).
Thanks to recent improvements, traveling in East Taiwan is now considerably quicker than before. Taipei to Taitung can be done in as little as three and a half hours (one way is NT$783 / US$26 / 19 euros). English-language timetable and fare information can be found on the TRA's official website but it isn't well designed and doesn't work on many mobile phones. What's more, few TRA employees understand English, so if you're at a station and have a question, you may be better off searching for someone who looks young and educated, and seeing if he/she can help you.
Tickets can be bought from ticket counters or through vending machines. The latter are a little tricky to use and for some you'll need coins. You can't get reserved seats when buying tickets from a vending machine, nor can you buy tickets for several days in advance. Making reservations a few days ahead of time is advised if you plan to travel on a weekend or a public holiday, of when taking especially popular routes like Kaohsiung to Taitung. If you go to a ticket counter and the train you want to buy tickets for is already fully booked, the clerk will suggest an alternative service. As he/she may not speak any English, taking a pen and paper to communicate is a good idea.
If you buy a ticket for a slow train and end up on a faster service, don't worry about being led away in handcuffs. Present your ticket to the inspector when he comes around and he'll ask you to pay the difference. If you board without any kind of ticket, you'll likely have to pay the complete fare plus 50%. Foreign nationals don't quality for senior-citizen fares.
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Taiwan's bullet train
Based on Japanese technology, Taiwan's high-speed railway (THSR) consists of a single double-tracked line through the island's western lowlands, linking Taipei in the north with Kaohsiung in the south. The fastest services cover the 345 km (214 miles) in 96 minutes, stopping at Banqiao and Taichung only. Slower trains take two hours and also stop at Taoyuan (convenient for Taiwan Taoyuan International Airport, the country's no. 1 point of entry), Hsinchu, Chiayi and Tainan. The picture here shows a THSR train stopping at Hsinchu.
In south Taiwan, both Chiayi and Tainan stations are a long way from the centers of those cities (allow up to 45 minutes to get from the downtown to the station), so the bullet train might not save you significant time. There are buses from Chiayi THSR Station to Chiayi City and the mountain resort of Alishan; from Tainan THSR Station there's a local train service.
Bullet-train travel isn't cheap. A one-way ticket from Taipei to Kaohsiung costs NT$1,630 in Economy or NT$2,140 in Business class. If you buy your tickets several days in advance you may be able to get as much as 35% off. There are also discounts on less-popular late evening services. Currently, the final southbound train from Taipei leaves the capital at 23.00.
In Business there are four rather than six seats in each row. However, as Economy offers a decent amount of space there's little reason to pay extra unless you need a 110v outlet for your laptop, or want the free coffee and newspaper.
Compared to Taiwan's conventional train system, the THSR is impressively bilingual. The average age of the staff is much younger and their English abilities are much better. Also, the HSR website is very easy to use; it's possible to book tickets with a non-Taiwan credit card and collect them at the station just before boarding.
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Recommended rail journeys
Trains don't serve as many places as buses, but still provide a good window through which you can enjoy Taiwan's excellent scenery. The best option is to take an express from Taipei to Taitung, in the southeast. Soon after leaving the capital you'll be in hill country. Houtong used to be a coal-mining district, while Yilan County has some attractive coastal views. But the best is further south, as between Hualien (jumping off point for Taroko Gorge) and Taitung the railroad goes through the East Rift Valley. This unspoiled region has a rich mixture of Chinese and aboriginal ethnicities as well as stirring mountain views. If possible, break your journey in one of the small towns in the valley so you can explore further by bus or bicycle, or on foot.
Other travel tips
Taiwan has its own tipping, eating, shopping and other idiosyncracies, so do read up a bit if you've never previously visited the island.