By Sharen Kaur
KUALA LUMPUR: Ports controlled by Tan Sri Syed Mokhtar Albukhary are talking to Keretapi Tanah Melayu Bhd (KTMB) to expand their logistics operations by rail in a bid to reduce dependency on road, water and air transport, amid the current market challenges.
It is understood that the parties are in discussions to transport cargo.
"They are looking at cheaper alternatives to move their cargo. KTMB covers 1,600km of rail track across Peninsular Malaysia and some stations are close to the ports.
"The port operators are also looking at the double-tracking system, which the government spent more than RM20 billion to develop. Movement by rail on the double tracks would be faster, cheaper and more reliable," said a source.
Syed Mokhtar, who according to Forbes has an estimated net worth of USD2.9 billion (RM10.7 billion), owns Port of Tanjung Pelepas (PTP) and Johor Port via MMC Corp Bhd.
He also controls Penang Port Sdn Bhd (PPSB) and has a stake in NCB Holdings Bhd, the owner of Northport, which operates a container terminal in Port Klang.
NCB also owns Malaysia's largest haulage company, Kontena Nasional Sdn Bhd.
KTMB chairman Datuk Nawawi Ahmad confirmed that the company was in talks with the port operators.
He hoped to ink several deals with them soon to increase the company's freight revenue.
KTMB is aiming to achieve RM650 million to RM700 million revenue this year in order to break even.
Last year, it recorded a revenue of RM370 million while losses were around RM80 million. Cargo revenue alone was about RM200 million.
"The port operators are keen on connectivity. It is a prudent call since the ports are located in the southern and northern states and we have more than 100 stations to accommodate their requests.
"We are hoping that through this deal, our cargo revenue can triple to around RM600 million. We can transport almost one million 20-foot equivalent units (TEUs) per annum for a start. We understand that the port operators are looking at transporting more than six million TEUs annually by rail alone.
"It will be a win-win situation for both KTMB and the Syed Mokhtar-led companies. We just want to make sure that revenue is higher than the cost per TEU per km. Currently, it is the other way round," Nawawi told Business Times.
PTP handles more than six million TEUs a year while Penang Port handles more than one million TEUs.
On another matter, Nawawi said Syed Mokhtar was not keen to take over KTMB but wanted to collaborate in terms of moving cargo.
"He is not buying KTMB but wants to cooperate with us." Business Times had reported that MMC was undertaking due diligence on KTMB in early 2012, with a view of taking over the ailing rail operator.
KTMB operates the national railway line while the rail assets and land are owned by a separate entity, the Railway Assets Corporation.
In total, the assets and land are estimated to be worth RM50 billion.
KUALA LUMPUR: Ports controlled by Tan Sri Syed Mokhtar Albukhary are talking to Keretapi Tanah Melayu Bhd (KTMB) to expand their logistics operations by rail in a bid to reduce dependency on road, water and air transport, amid the current market challenges.
It is understood that the parties are in discussions to transport cargo.
"They are looking at cheaper alternatives to move their cargo. KTMB covers 1,600km of rail track across Peninsular Malaysia and some stations are close to the ports.
"The port operators are also looking at the double-tracking system, which the government spent more than RM20 billion to develop. Movement by rail on the double tracks would be faster, cheaper and more reliable," said a source.
Syed Mokhtar, who according to Forbes has an estimated net worth of USD2.9 billion (RM10.7 billion), owns Port of Tanjung Pelepas (PTP) and Johor Port via MMC Corp Bhd.
He also controls Penang Port Sdn Bhd (PPSB) and has a stake in NCB Holdings Bhd, the owner of Northport, which operates a container terminal in Port Klang.
NCB also owns Malaysia's largest haulage company, Kontena Nasional Sdn Bhd.
KTMB chairman Datuk Nawawi Ahmad confirmed that the company was in talks with the port operators.
He hoped to ink several deals with them soon to increase the company's freight revenue.
KTMB is aiming to achieve RM650 million to RM700 million revenue this year in order to break even.
Last year, it recorded a revenue of RM370 million while losses were around RM80 million. Cargo revenue alone was about RM200 million.
"The port operators are keen on connectivity. It is a prudent call since the ports are located in the southern and northern states and we have more than 100 stations to accommodate their requests.
"We are hoping that through this deal, our cargo revenue can triple to around RM600 million. We can transport almost one million 20-foot equivalent units (TEUs) per annum for a start. We understand that the port operators are looking at transporting more than six million TEUs annually by rail alone.
"It will be a win-win situation for both KTMB and the Syed Mokhtar-led companies. We just want to make sure that revenue is higher than the cost per TEU per km. Currently, it is the other way round," Nawawi told Business Times.
PTP handles more than six million TEUs a year while Penang Port handles more than one million TEUs.
On another matter, Nawawi said Syed Mokhtar was not keen to take over KTMB but wanted to collaborate in terms of moving cargo.
"He is not buying KTMB but wants to cooperate with us." Business Times had reported that MMC was undertaking due diligence on KTMB in early 2012, with a view of taking over the ailing rail operator.
KTMB operates the national railway line while the rail assets and land are owned by a separate entity, the Railway Assets Corporation.
In total, the assets and land are estimated to be worth RM50 billion.
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