On February 1, 1999, Kaohsiung Municipal Government signalled the start of this BOT (Build, Operate, Transfer) project by solicitation of private sector investment in the initial phase of a Kaohsiung Rapid Transit System-the Red and Orange Lines Construction Project. This first step demonstrated Kaohsiung Municipal Government's determination to propel Kaohsiung City and County towards a prosperous future. The Kaohsiung Rapid Transit System will not only fulfill a transport function but will also provide the framework and catalyst for the development of the fabric, the economy and the quality of life of the area, and for the promotion of community life, culture and art.

China Steel Corporation has been based in Kaohsiung for nearly 30 years. Based on its mission objective of contributing to the development of its home city, China Steel sponsored the establishment of the provisional office of the Kaohsiung Rapid Transit Corporation in February 1999 and lodged an application to invest in the project following the solicitation of the Kaohsiung Municipal Government. The main participants in the Kaohsiung Rapid Transit Corporation are: China Steel Corporation, Southeast Cement Corporation, RSEA Engineering Corporation, China Development Industrial Bank and Industrial Bank of Taiwan.

Following the public appraisal of the applications by the Kaohsiung Municipal Government, Kaohsiung Rapid Transit Corporation was selected on May 26, 1999 as one of the shortlisted applicants. On May 10, 2000, the Corporation was selected as the best applicant and concluded the relevant agreements and protocols with the Kaohsiung Municipal Government in August 2000. The raising of the initial capital stock was completed on December 19, 2000 and an inaugural meeting of the stockholders was held on the same day. Kaohsiung Rapid Transit Corporation obtained a company license and was registered on December 28, 2000. The Corporation signed the" Construction and Operation Agreement" and" Development Agreement" with the Kaohsiung Municipal Government on January 12, 2001.