By Sharen Kaur
sharen@nstp.com.my
Published in NST on February 15, 2013
sharen@nstp.com.my
Published in NST on February 15, 2013
It is understood that this was the estimate given by KTMB officials to turn around the loss-making
railway company.
KTM Bhd needs up to RM7 billion to nurse it back to profitability, sources familiar with the matter said.
It is understood that this was the estimate given by KTMB officials to turn around the loss-making railway company.
"KTMB needs to improve its overall operation to net it profits. A substantial amount is needed to upgrade the tracks, coaches and locomotives, as well as signalling and communications system to operate more efficiently," a source told Business Times.
KTMB has been recording losses since its corporatisation in 1992. However, it did post net profits of RM9 million to RM15 million from 1993 to 1995.
Since then, it posted losses of RM82.81 million in 2007 before a bigger loss of RM118.91 million in 2008.
The losses were attributed to high operating cost, low passenger and cargo fares, and a decline in the cargo business, its biggest revenue earner.
KTMB president Datuk Elias Kadir recently said the cargo business was currently registering losses of up to RM60 million.
The national railway company has been the target of several companies keen to take it private, including MMC Corp Bhd, a company controlled by Tan Sri Syed Mokhtar Al-Bukhary.
In 2011, Business Times reported that MMC was interested to take over the KTMB operation in a RM1 billion deal.
MMC undertook a due diligence on KTMB and submitted its takeover proposal to the Ministry of Finance Inc about two to three months ago.
It is learnt that MMC had requested for "sweeteners" from the government, which includes financial backing.
Railway Union of Malaya (RUM) president Abdul Razak Md Hassan, when contacted, said the union will continue to object the takeover bids by MMC or other parties.
He said the KTMB current management has been able to reduce the company's losses from RM200 million in 2011 to RM70 million last year.
"We expect losses to narrow further this year. KTMB has been able to increase its income stream from the cargo, commuter and intercity services. These businesses have improved through enhanced efficiency, on-time delivery of trains and the addition of new trains," Abdul Razak added.
KTM Bhd needs up to RM7 billion to nurse it back to profitability, sources familiar with the matter said.
It is understood that this was the estimate given by KTMB officials to turn around the loss-making railway company.
"KTMB needs to improve its overall operation to net it profits. A substantial amount is needed to upgrade the tracks, coaches and locomotives, as well as signalling and communications system to operate more efficiently," a source told Business Times.
KTMB has been recording losses since its corporatisation in 1992. However, it did post net profits of RM9 million to RM15 million from 1993 to 1995.
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The losses were attributed to high operating cost, low passenger and cargo fares, and a decline in the cargo business, its biggest revenue earner.
KTMB president Datuk Elias Kadir recently said the cargo business was currently registering losses of up to RM60 million.
The national railway company has been the target of several companies keen to take it private, including MMC Corp Bhd, a company controlled by Tan Sri Syed Mokhtar Al-Bukhary.
In 2011, Business Times reported that MMC was interested to take over the KTMB operation in a RM1 billion deal.
MMC undertook a due diligence on KTMB and submitted its takeover proposal to the Ministry of Finance Inc about two to three months ago.
It is learnt that MMC had requested for "sweeteners" from the government, which includes financial backing.
Railway Union of Malaya (RUM) president Abdul Razak Md Hassan, when contacted, said the union will continue to object the takeover bids by MMC or other parties.
He said the KTMB current management has been able to reduce the company's losses from RM200 million in 2011 to RM70 million last year.
"We expect losses to narrow further this year. KTMB has been able to increase its income stream from the cargo, commuter and intercity services. These businesses have improved through enhanced efficiency, on-time delivery of trains and the addition of new trains," Abdul Razak added.
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