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

Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 22nd of August 2015

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

On the 7th of August, it was reported that Prime Minister Najib had requested KTM in KL Sentral to increase the number of manual ticketing counters to reduce the queue of people buying tickets.[1] Instead of asking KTM to add manual ticketing counters, he should ask the Minister of Transportation why the RM85m Automatic Fare Collection (AFC) contract which was awarded in 2011 is a total and complete failure which has caused the long queues which he found at the KTM station in KL Sentral and which he would also find at many KTM stations in the Klang Valley.

The award of the RM85m AFC contract to Hopetech Sdn Bhd was raised by my colleague, Tony Pua, way back in 2011 when he questioned the track record of Hopetech and two of its directors as well as the fact that Hopetech’s bid was 18% higher than 2 other bidders.[2] In 2013, Tony Pua issued another statement asking for answers for the non-implementation of the AFC system and for the termination of Hopetech’s contract.[3]

In a recent parliamentary reply to my colleague, Teo Kok Seong, it was stated that the contract to Hopetech was cancelled in April 2013 because they failed to fulfil their contractual obligations. It was further stated that RM21.5m of the outstanding payment to Hopetech had been withheld. (See Appendix 1 below). When I checked the latest records at the Companies Commission of Malaysia (CCM), I found that Hopetech was in the process of being liquidated (See Appendix 2 below).

In the meantime, there are uninstalled and in some cases, unwrapped, AFC ticketing machines at KTM commuter stations all over the Klang Valley (See Appendix 3 below).

Rather than asking for more manual ticket counters to be installed, PM Najib should instead direct his Minister of Transportation to:

(i)                  Conduct an internal investigation into why Hopetech was given this contract in the first place and explain why it was unable to fulfil its contractual obligations

(ii)                Ask MACC to disclose the result of its investigation (if any was conducted) into the awarding of the contract to Hopetech

(iii)               Explain how much of the RM85m contract was paid to Hopetech and what is being done to get back some or all of this money

(iv)              Disclose the losses experienced by MavCap (12.5%) and Lembaga Tabung Angkatan Tentera (LTAT) (15.0%), both of whom were minority shareholders in Hopetech (Appendix 4)

(v)                Explain to the public the process by which the new contract will be awarded and its implementation strictly monitored to avoid another such fiasco.

Unless of course, the Prime Minister prefers the cheaper option of just adding manual ticket counters in all of the KTM Commuter stations in the country.

Dr. Ong Kian Ming
Member of Parliament for Serdang

Appendix 1: Parliamentary Reply to Teo Kok Seong, MP for Rasah

Appendix 2: Hopetech in the process of being winded up / liquidated

Appendix 3: Uninstalled and unwrapped AFC ticketing machines in KTM Serdang

Appendix 4: Ownership of Hopetech Sdn Bhd (Mavcap and LTAT as minority shareholders)