By Sharen Kaur
Published in NST on Jan 2, 2014
Published in NST on Jan 2, 2014
RM5b DEAL: Company awaiting response for a partnership to privatise railway operations, sources say
GAMUDA Bhd may submit a proposal to Malaysian Mining Corp (MMC) Bhd to
jointly take over Keretapi Tanah Melayu Bhd’s (KTMB) operations in a
deal worth more than RM5 billion.
Sources familiar with the matter said Gamuda and MMC, a company controlled by Albukhary Foundation, are in discussions over
the matter.
“An agreement to jointly privatise KTMB is in the works. Gamuda is awaiting MMC’s response for a partnership to take over and privatise KTMB. The deal would require investments of more than RM5 billion,” the sources said.
Gamuda and MMC are already involved in a joint venture to carry out the
double-tracking railway project from Ipoh to Padang Besar on a
design-and-build basis, which is now nearing
completion.
Business Times had reported in late 2011 that MMC was planning a takeover of the ailing KTMB.
The proposed takeover would give MMC substantial control over the nation’s railway and logistics operations.
The conglomerate owns the Senai Airport and major local ports, including the Port of Tanjung Pelepas and Pasir Gudang Port.
KTMB has assets and land worth an estimated RM50 billion. It is the operator of the national railway line, while the assets and land are owned by Railway Assets Corp (RAC).
Although the assets are parked under RAC, KTMB has a big influence on how the assets are utilised.
KTMB, which is involved in freight, intercity and commuter train services, among others, has been bleeding red since its corporatisation 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 is open to proposals on the privatisation of KTMB.
MMC received a due diligence letter from the Transport Ministry about two years ago and a feasibility study was carried out.
It is understood that MMC had submitted a proposal to the Minister of Finance Inc. However, it did not fulfil all the requirements and criteria for a takeover.
“MMC did not outline how it intended to turn around KTMB. They only talked about property development on KTMB’s owned land.
There has been no further development,” the source said.
The takeover by MMC was expected to be funded by government-backed bonds.
Deputy Transport Minister Abdul Aziz Kaprawi had said there are no plans to privatise KTMB.
Sources familiar with the matter said Gamuda and MMC, a company controlled by Albukhary Foundation, are in discussions over
the matter.
“An agreement to jointly privatise KTMB is in the works. Gamuda is awaiting MMC’s response for a partnership to take over and privatise KTMB. The deal would require investments of more than RM5 billion,” the sources said.
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completion.
Business Times had reported in late 2011 that MMC was planning a takeover of the ailing KTMB.
The proposed takeover would give MMC substantial control over the nation’s railway and logistics operations.
The conglomerate owns the Senai Airport and major local ports, including the Port of Tanjung Pelepas and Pasir Gudang Port.
KTMB has assets and land worth an estimated RM50 billion. It is the operator of the national railway line, while the assets and land are owned by Railway Assets Corp (RAC).
Although the assets are parked under RAC, KTMB has a big influence on how the assets are utilised.
KTMB, which is involved in freight, intercity and commuter train services, among others, has been bleeding red since its corporatisation 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 is open to proposals on the privatisation of KTMB.
MMC received a due diligence letter from the Transport Ministry about two years ago and a feasibility study was carried out.
It is understood that MMC had submitted a proposal to the Minister of Finance Inc. However, it did not fulfil all the requirements and criteria for a takeover.
“MMC did not outline how it intended to turn around KTMB. They only talked about property development on KTMB’s owned land.
There has been no further development,” the source said.
The takeover by MMC was expected to be funded by government-backed bonds.
Deputy Transport Minister Abdul Aziz Kaprawi had said there are no plans to privatise KTMB.
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