- Published in NST News, December 4, 2019
KUALA LUMPUR:INDUSTRY players have sketched out a rescue plan for Keretapi
Tanah Melayu Bhd (KTMB), the country’s oldest railway service, to save it from further ‘derailment’ and return the company to its glory days.
Sources said KTMB was in desperate need of funds to refurbish and repair its ageing assets like locomotives, train sets and wagons.
KTMB also requires funds to acquire new train sets and locomotives to serve passengers on its more than 1,600km railway network in Peninsular Malaysia.
Sources said the Transport Ministry (MoT) should outsource the asset maintenance and railway operation for KTMB to reduce its yearly losses.
‘The government should stop stepping in to bail out KTMB. They need to look at privatising KTMB’s operations in order to return it to profitability.
‘Several companies are offering to pump in more than RM1.5 billion to take over the rail
company’s operations and inject new businesses to complement KTMB’s passenger and cargo train service.
‘Hopefully, with better profits from the cargo service, they will be able to improve the overall
passenger train service and provide higher speed trains with greater comfort,’ said one source.
The KTM network, if managed and operated efficiently, will boost businesses, create jobs and rebalance the economy. It will also boost passenger confidence.
KTMB operates the national railway line, while the rail assets and land are owned by a separate entity, the Railway Assets Corporation, parked under MoT. In total, the assets and land are estimated to be worth about RM40 billion to RM50 billion.
According to the second series of the Auditor General’s Report 2018 published on Monday, KTMB was relying on financial assistance from the Finance Ministry (MoF).
From 1992 until July this year, KTMB had received RM1.46 billion in financial assistance from MoF.
Findings by the audit team showed that KTMB had an accumulated loss of RM2.83 billion as of Dec 31 last year.
KTMB will be pushed into the red again this year. Its two main services recorded losses of between RM39.82 million and RM77.76 million from 2016 until July this year.
The report said KTMB’s main businesses - intercity train, KTM Komuter, electric train service (ETS)
and cargo services - contributed 96.8 per cent of the company’s total revenue.
From 2015 until 2017, the KTM Komuter service was the largest contributor for the company’s income. However, the service incurred losses after factoring its operation cost.
KTMB’s income statement showed that KTM Komuter and intercity rail services recorded a loss of between RM39.82 million and RM77.76 million, as operating costs exceeded the income generated from 2016 until July this year. During the same period, KTMB’s cargo and ETS services registered a
revenue of between RM4.17 million and RM59.38 million.
The company’s intercity and KTM Komuter rail services are expected to continue to record a loss of between RM107.12 million and RM307.6 million from this year until 2025, the report said.
A contributing factor is ticket fares for the intercity rail service, which had remained stagnant since 1993.
Ticket fares for the service remained at between four sen and 15 sen per km, depending on classes. As for the KTM Komuter service, its fares were increased from between six and 11 sen per km to between seven sen and 31 sen per km, depending on the distance and payment method, on Dec 2,
2015.
‘The fares per km should be double or triple the current price. KTMB will not be able to operate efficiently if the fares remain the same. The previous management have been voicing this out for
years. There is no profit to be made from low fares,’ said a person with knowledge on railway matters.
The delay in completing the Klang Valley Electrified Double Track project (KVDT 1 & KVDT2
lines) and the availability of the Mass Rapit Transit and Light Rail Transit in the Klang Valley are other factors which have resulted in lower revenue for KTMB.
The KVDT2 involves the rehabilitation of 265km of KTM railway tracks, stretching from Salak
South to Seremban and from Simpang Port Klang to Port Klang and it would be completed in five years’ time.
Dhaya Maju LTAT Sdn Bhd, a joint venture company between Dhaya Maju Infrastructure (Asia) Sdn
Bhd and Armed Forces Superannuation Fund Board, is the contractor for the RM4.48 billion KVDT2 project.
Dhaya Maju is also the contractor for the RM1.41 billion KVDT1, which involves upgrading the
Rawang-Salak Selatan and Sentul-Simpang Batu lines.
As at June 30, 80.3 per cent of KVDT1 has been completed, with the project slated to be delivered next year, a year later than anticipated.
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KUALA LUMPUR:INDUSTRY players have sketched out a rescue plan for Keretapi
Tanah Melayu Bhd (KTMB), the country’s oldest railway service, to save it from further ‘derailment’ and return the company to its glory days.
 |
| KTM Komuter Trains (Pic credit : KTMB) |
KTMB also requires funds to acquire new train sets and locomotives to serve passengers on its more than 1,600km railway network in Peninsular Malaysia.
Sources said the Transport Ministry (MoT) should outsource the asset maintenance and railway operation for KTMB to reduce its yearly losses.
‘The government should stop stepping in to bail out KTMB. They need to look at privatising KTMB’s operations in order to return it to profitability.
‘Several companies are offering to pump in more than RM1.5 billion to take over the rail
company’s operations and inject new businesses to complement KTMB’s passenger and cargo train service.
‘Hopefully, with better profits from the cargo service, they will be able to improve the overall
passenger train service and provide higher speed trains with greater comfort,’ said one source.
The KTM network, if managed and operated efficiently, will boost businesses, create jobs and rebalance the economy. It will also boost passenger confidence.
KTMB operates the national railway line, while the rail assets and land are owned by a separate entity, the Railway Assets Corporation, parked under MoT. In total, the assets and land are estimated to be worth about RM40 billion to RM50 billion.
According to the second series of the Auditor General’s Report 2018 published on Monday, KTMB was relying on financial assistance from the Finance Ministry (MoF).
From 1992 until July this year, KTMB had received RM1.46 billion in financial assistance from MoF.
Findings by the audit team showed that KTMB had an accumulated loss of RM2.83 billion as of Dec 31 last year.
KTMB will be pushed into the red again this year. Its two main services recorded losses of between RM39.82 million and RM77.76 million from 2016 until July this year.
The report said KTMB’s main businesses - intercity train, KTM Komuter, electric train service (ETS)
and cargo services - contributed 96.8 per cent of the company’s total revenue.
From 2015 until 2017, the KTM Komuter service was the largest contributor for the company’s income. However, the service incurred losses after factoring its operation cost.
KTMB’s income statement showed that KTM Komuter and intercity rail services recorded a loss of between RM39.82 million and RM77.76 million, as operating costs exceeded the income generated from 2016 until July this year. During the same period, KTMB’s cargo and ETS services registered a
revenue of between RM4.17 million and RM59.38 million.
The company’s intercity and KTM Komuter rail services are expected to continue to record a loss of between RM107.12 million and RM307.6 million from this year until 2025, the report said.
A contributing factor is ticket fares for the intercity rail service, which had remained stagnant since 1993.
Ticket fares for the service remained at between four sen and 15 sen per km, depending on classes. As for the KTM Komuter service, its fares were increased from between six and 11 sen per km to between seven sen and 31 sen per km, depending on the distance and payment method, on Dec 2,
2015.
‘The fares per km should be double or triple the current price. KTMB will not be able to operate efficiently if the fares remain the same. The previous management have been voicing this out for
years. There is no profit to be made from low fares,’ said a person with knowledge on railway matters.
The delay in completing the Klang Valley Electrified Double Track project (KVDT 1 & KVDT2
lines) and the availability of the Mass Rapit Transit and Light Rail Transit in the Klang Valley are other factors which have resulted in lower revenue for KTMB.
The KVDT2 involves the rehabilitation of 265km of KTM railway tracks, stretching from Salak
South to Seremban and from Simpang Port Klang to Port Klang and it would be completed in five years’ time.
Dhaya Maju LTAT Sdn Bhd, a joint venture company between Dhaya Maju Infrastructure (Asia) Sdn
Bhd and Armed Forces Superannuation Fund Board, is the contractor for the RM4.48 billion KVDT2 project.
Dhaya Maju is also the contractor for the RM1.41 billion KVDT1, which involves upgrading the
Rawang-Salak Selatan and Sentul-Simpang Batu lines.
As at June 30, 80.3 per cent of KVDT1 has been completed, with the project slated to be delivered next year, a year later than anticipated.
WATCH THE VIDEO
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