‘KTMB privatisation likely to damage the business’

By Sharen Kaur

sharen@mediaprima.com.my

Published in NST on August 23, 2014

KUALA LUMPUR: Privatising assets owned by Keretapi Tanah Melayu Bhd (KTMB), Malaysia’s largest train company, will cause more damage to the business, says Railwaymen’s Union of Malaya (RUM).

RUM president Abdul Razak Md Hassan said although KTMB is currently loss-making, there are many ways to turn around the company.

This includes boosting the revenue for cargo, intercity and commuter through effective marketing and promotion, and selling advertising space at trains and stations, he said.

“The government is forgoing the future earnings of KTMB if it accepts MMC Corp Bhd’s plan to privatise the cargo unit. KTMB would no longer receive income stream from the unit, which is  its only profitable business”.

Business Times reported recently that MMC has presented a proposal to KTMB board to privatise the cargo operation and estimates put the initial sum at RM2 billion.  The proposal was presented to KTMB president Datuk Elias Kadir around two weeks ago and he is in favour of it. MMC has also received an approval letter to do a due diligence on the privatisation effective yesterday.

If found both viable and profitable, a joint-venture company would be set up with KTMB to privatise the cargo business, with MMC holding the majority share.

“The privatisation of the cargo business is not a rescue plan as it will only benefit MMC, which is to complement its port operation,” Abdul Razak said. 

He said previous attempts to privatise KTMB, resulted in failure.

  Abdul Razak said MMC’s takeover would only dampen the company’s potential growth.