By Sharen Kaur
sharen.kaur@gmail.com
Published in NST on March 4, 2013
sharen.kaur@gmail.com
Published in NST on March 4, 2013
COULD a white knight with passion for railway be the final solution to help revive national railway company Keretapi Tanah Melayu Bhd (KTMB)?
The government-owned railway company has been spending significant sums on network improvements but it has yet to make reasonable profits.
KTMB, which is involved in freight, inter-city and commuter train services, among others, has been bleeding red ink since it was corporatised in August 1992.
It did make a net profit of RM9 million to RM15 million from 1993 to 1995 but later sank into the red.
The government feels privatisation is a way to tackle KTMB's debts; the national rail operator had RM1.45 billion in cumulative net losses up until 2008.
In 2011 alone, the losses were almost RM200 million, attributed to high operating cost, low passenger and cargo fares and a drop in the cargo business.
Business Times reported recently that KTMB will need RM7 billion for upgrading and maintenance of infrastructure and rolling stocks and to fund the operation costs to churn it back to profitability.
KTMB's historical rail timeline dates back to 1869. The first attempt to lay tracks, made by timber, was from Johor Baru to Gunung Pulai (32.1km). The Kuala Lumpur railway station was opened in 1886. From 1900 and 1950, tracks were laid nationwide.
In 1948, Malayan Railway Administration (MAR) was created under The Malayan Railway Ordinance 1948 to manage railways previously managed by the states under FMS Railway. MAR was renamed as Keretapi Tanah Melayu.
Between 1997 and 2003, several companies came up with plans to re-privatise KTMB. They included Renong Group and MMC-Gamuda. The government shelved the plan as it was not financially viable.
In late 2011, MMC, controlled by Malaysia's eighth richest man Tan Sri Syed Mokthar Albukhary, confirmed a Business Times report on its plan to pump RM1 billion and take over KTMB's operations.
Industry observers believe MMC had something up its sleeve as KTMB is the only missing link in their journey to have a complete logistics network here.
MMC operates Senai International Airport and Port of Tanjung Pelepas in Johor, and Penang port.
"If MMC gets KTMB, it will void the gap between the ports and airport.
"We think that MMC is not just keen on KTMB's operations but also the land housing the KTM head office and railway station," they said.
MMC group managing director Datuk Hasni Harun said last year that besides tapping new opportunities, including ridership, cargo and freight, there will be synergy between MMC's own port operations and KTMB's train services.
Business Times reported recently that Global Rail Sdn Bhd plans to invest RM1 billion with its foreign partners, which include Bombardier Transportation Switzerland AG and China Railway Corp, to re-engineer KTMB without privatisation.
Global Rail is owned by Fan Boon Heng, who previously headed ABB Daimler-Benz Transportation and later Balfour Beatty Rail Sdn Bhd for 20 years. Former KTMB managing director Datuk Mohd Salleh Abdullah is now Global Rail chairman.
The company's proposal includes operation lease of rolling stocks, maintenance of the railway infrastructure and refurbishment of existing electric multiple units.
It seems that Global Rail's proposal is in line with the current KTMB management thoughts, which has the support from the Railway Union of Malaya and senior officials.
Whether Global Rail could be the only white knight to rescue KTMB is left to be seen.
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KTMB, which is involved in freight, inter-city and commuter train services, among others, has been bleeding red ink since it was corporatised in August 1992.
It did make a net profit of RM9 million to RM15 million from 1993 to 1995 but later sank into the red.
The government feels privatisation is a way to tackle KTMB's debts; the national rail operator had RM1.45 billion in cumulative net losses up until 2008.
Business Times reported recently that KTMB will need RM7 billion for upgrading and maintenance of infrastructure and rolling stocks and to fund the operation costs to churn it back to profitability.
KTMB's historical rail timeline dates back to 1869. The first attempt to lay tracks, made by timber, was from Johor Baru to Gunung Pulai (32.1km). The Kuala Lumpur railway station was opened in 1886. From 1900 and 1950, tracks were laid nationwide.
In 1948, Malayan Railway Administration (MAR) was created under The Malayan Railway Ordinance 1948 to manage railways previously managed by the states under FMS Railway. MAR was renamed as Keretapi Tanah Melayu.
Between 1997 and 2003, several companies came up with plans to re-privatise KTMB. They included Renong Group and MMC-Gamuda. The government shelved the plan as it was not financially viable.
In late 2011, MMC, controlled by Malaysia's eighth richest man Tan Sri Syed Mokthar Albukhary, confirmed a Business Times report on its plan to pump RM1 billion and take over KTMB's operations.
Industry observers believe MMC had something up its sleeve as KTMB is the only missing link in their journey to have a complete logistics network here.
MMC operates Senai International Airport and Port of Tanjung Pelepas in Johor, and Penang port.
"If MMC gets KTMB, it will void the gap between the ports and airport.
"We think that MMC is not just keen on KTMB's operations but also the land housing the KTM head office and railway station," they said.
MMC group managing director Datuk Hasni Harun said last year that besides tapping new opportunities, including ridership, cargo and freight, there will be synergy between MMC's own port operations and KTMB's train services.
Business Times reported recently that Global Rail Sdn Bhd plans to invest RM1 billion with its foreign partners, which include Bombardier Transportation Switzerland AG and China Railway Corp, to re-engineer KTMB without privatisation.
Global Rail is owned by Fan Boon Heng, who previously headed ABB Daimler-Benz Transportation and later Balfour Beatty Rail Sdn Bhd for 20 years. Former KTMB managing director Datuk Mohd Salleh Abdullah is now Global Rail chairman.
The company's proposal includes operation lease of rolling stocks, maintenance of the railway infrastructure and refurbishment of existing electric multiple units.
It seems that Global Rail's proposal is in line with the current KTMB management thoughts, which has the support from the Railway Union of Malaya and senior officials.
Whether Global Rail could be the only white knight to rescue KTMB is left to be seen.
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