TAIPEI -- A Japanese consortium has been awarded priority negotiation rights for contracts involving the construction of a high-speed railway between Taipei and Kaohsiung, the Taiwanese builder of the rail system announced Tuesday. The announcement by Taiwan High-Speed Rail Corp. could pave the way for the Japanese consortium to win $2.58 billion in contracts. If realized, it would be the first time Japan's bullet-train technology has been exported. The Japanese consortium, Taiwan Shinkansen Corp., has been competing for the Taiwanese contract with a Franco-German consortium, Eurotrain. In announcing the decision, THSRC President Liu Kuo-chih said his company selected the Japanese consortium because its proposal is relatively flexible and its price is more competitive. Liu did not disclose any specific figure put forward by the Japanese, however. The Japanese consortium is made up of about 30 firms, including Mitsui & Co., Mitsubishi Heavy Industries Ltd., Kawasaki Heavy Industries Ltd., Toshiba Corp. and two JR group companies -- Central Japan Railway Co. and West Japan Railway Co. Under the build-operate-transfer scheme, THSRC will operate the railway for 35 years before handing it over to the government. THSRC invited international bids for the project involving the provision of rolling stock and installation of traffic signal and communication systems for the 340-km line. The line would allow passengers to traverse the island at speeds of up to 300 kph in about 90 minutes. Japan beat out the European group, which comprises GEC Alsthom of France and Germany's Siemens AG, although THSRC had in 1997 stated that it preferred the Alsthom-Siemens group as the project's prime contractor. The high-speed rail system, to start operation in late October 2005, will link Taiwan's two biggest cities in between 90 minutes and two hours. Taiwan, being a mountainous country subject to frequent earthquakes, has similar geographical conditions to Japan. These conditions, along with Japan's offer to provide low-interest governmental loans to the Taiwanese project, apparently helped the Japanese consortium overtake its European rival in the competition.