• Pakatan Harapan (PH) offers a fairer deal to KTMB and its workers

    Media Statement by Pakatan Harapan on the 9th of August, 2017

    Pakatan Harapan (PH) offers a fairer deal to KTMB and its workers

    The Railway Network Access Agreement (RNAA) is an agreement between KTMB and the Railway Assets Corporation (RAC) which will see KTMB transferring all of its rolling stocks and lands to RAC. This exercise is supposed to be completed sometime in 2018.[1]

    Pakatan Harapan is opposed to the RNAA for the following reasons:

    (i)               This is a back door way for the government to provide access to crony companies to use the rail network to undermine KTMB’s core businesses including the freight and haulage business that comprises 42% of its revenue (RM216 out of RM516 million in Financial Year 2015).

    (ii)              This will increase the costs of operations for KTMB because RAC will charge KTMB for the use of the rolling stock.

    (iii)            RAC, with only 38 employees, is in no position to properly manage its assets including the maintenance of the rolling stock and the track. It is likely that these responsibilities would be sub-contracted out to other crony companies.

    KTMB has suffered accumulated losses of RM855 million from 2009 to 2015 because of low ticket prices and expensive procurement contracts. For example, KTMB wasted RM85 million on a contract for an Automatic Fare Collection (AFC) ticketing system that could not be implemented.[2] More recently, the then President of KTM, Datuk Sarbini Tijan, was asked to go on leave pending an internal inquiry on procurement deals worth millions of ringgit.[3]

    RAC has also not been profitable. It has accumulated losses of RM372 million from 2009 to 2015. RAC does not have enough staff to properly manage the RM36 billion in assets including land. Its mismanagement of train maintenance contract payments was reported in the Auditor General’s report in 2013.[4]

    Pakatan Harapan promises a fairer deal to KTMB and its 6000 workers including:

    1)     Cancelling the RNAA between RAC and KTMB

    2)     Transferring the assets in RAC to KTMB as a way to maximize the value of these assets. The small size of RAC prevents it from increasing its revenue from ventures such as transit oriented development and advertising and retail. These assets should be transferred to KTMB and KTMB should be allowed to expand its expertise in these areas. This will be the way forward to KTMB to regain its profitability and also to minimize the need to increase ticket prices.

    3)     Review the cost and suitability of the East Coast Rail Link (ECRL) project. The assets under ECRL i.e. the rolling stock, the track, the land and the stations, will not be owned by RAC or KTM. Instead, it will be owned by a newly established 100% Ministry of Finance Owned Entity, Malaysia Rail Line (MRL) Sdn Bhd. It has been reported that the ECRL service will be run by another operator which has not been named.[5] Not only is the cost of the ECRL extraordinarily high, it is very likely its operations will be awarded via direct negotiation.

    4)     Implement open tenders for all procurements of assets and services by KTMB

    5)     Not to privatise KTMB

    With these policies, we can chart the path towards financial profitability for KTMB, guarantee continued low prices for the passengers and ensure employment security and welfare for thousands of railway workers.

    Tan Sri Muhyidddin Yassin, President of BERSATU
    Liew Chin Tong, MP for Kluang
    Dato’ Abdullah Sani bin Abdul Hamid, MP for Kuala Langat
    Dr. Hatta Ramli, MP for Kuala Krai

    [1] http://www.theedgemarkets.com/article/transport-ministry-says-agreement-will-not-cost-4000-job-losses-ktmb

    [2] http://tonypua.blogspot.my/2011/01/ktmb-rm85m-contract-to-company-without.html andhttp://ongkianming.com/2015/08/22/press-statement-prime-minister-najib-should-look-at-the-failure-of-the-automatic-fare-collection-afc-system-rather-than-asking-for-new-ktm-ticket-counters-to-be-added/

    [3] http://www.thestar.com.my/business/business-news/2017/01/11/rail-controversy/

    [4] http://english.astroawani.com/business-news/highlights-auditor-generals-report-2013-series-2-37880

    [5] http://www.thestar.com.my/business/business-news/2017/03/29/east-coast-rail-kicks-off/

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