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Friday, March 23, 2012

MMC’s privatisation of KTMB starts?


MMC Corp has started its private takeover of KTMB, ringing alarm bells for the train company's union, who fear eventual lay-offs and higher fares to follow suit.
PETALING JAYA: Railway workers are worried that a private takeover of Keretapi Tanah Melayu Berhad (KTMB) will lead to more expensive fares and the potential lay-off of many of its 5,500 employees.
Railwaymen’s Union of Malaya (RUM) president Abdul Razak Md Hassan claimed that nothing good could come out of MMC Corp Bhd’s plan to privatise the country’s largest rail company.
“No good can come from MMC’s takeover of KTMB. The propaganda that says that MMC can inject RM1 billion worth of funds cannot be taken in as a large contribution, because it is not enough to buy KTMB as an entity.”
“…The union also does not see any benefits for its non-executive and executive KTMB staff. In fact, we feel that many benefits will be slashed along with the high possibility that workers may be laid off,” he said in a press statement.
Late last year, MMC Corp confirmed that it wanted to take over the train company and in doing so, inject RM1 billion into KTMB.
Before doing so, it planned on going through a “due diligence” exercise and conduct a feasibility study in the process.
Up until then, the train company had been suffering massive losses. FMT previously reported that KTMB had been seeing constant losses since the early 1990s; with more than RM1.45 billion in total up to 2008.
In July last year, RUM also accused the company’s management of allegedly losing RM300 million of KTMB’s cash reserves and overdrafts. (KTMB is wholly-owned by the Finance Ministry.)
Alarm bells however rang for RUM when it claimed that MMC had brought 20 of its consultants into KTMB to start the “due diligence” exercise.
KTMB president coy on details
Abdul Razak said that KTMB had been privatised (at least partially) before, to disastrous results.
From 1997 to 2002, he said that Konsortium Marak Unggul (KMU) Sdn Bhd was on a contract to handle the company’s management.
“In the beginning, it seemed as though KMU could improve KTMB and increase its revenue as well as its profits,” he said.
He added that KMU failed to do this and had even turned many of KTMB non-executive staff into “surplus”.
Abdul Razak also warned that a private takeover of KTMB would result in higher fares; a burden for low-income-earners who relied on the Intercity service for travel.
He then demanded that KTMB remain in government hands, adding that the union would hold an emergency meeting to discuss the matter.
Speaking to FMT, KTMB president Aminuddin Adnan confirmed that MMC’s consultants had visited the company this week.
He was however coy on the details.
“It’s not proper for us to comment. We are not sure what it’s going to be like…(as) the due diligence has just started,” he said.
Aminuddin also declined to say if Abdul Razak was overreacting.

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