Global Rail Sdn Bhd, a privately-held railway engineering firm, plans to invest some RM1 billion to restructure the loss-making KTM Bhd (KTMB) into an efficient railway operation without it having to be privatised.
The company plans to do this with its technology partners, namely Bombardier Transportation Switzerland AG, Indonesia's PT Industri Keretapi (PT Inka) and China Railway Co.
The group had presented its proposal on KTMB's re-engineering to the Transport Ministry a year ago, said Global Rail group managing director Fan Boon Heng.
He said the basis of the proposal will be public-private partnership (PPP), taking the form of private finance initiative (PFI).
"Although the restructuring may seem impossible, the injection of new private sector thinking, knowhow and capital would possibly turn KTMB into a billion-ringgit revenue earner within three years if we start now," Fan said in an interview with Business Times recently.
He said the proposal includes the outsourcing of rolling stocks and maintenance of railway infrastructure.
It also involves the setting-up of workshop facilities to manufacture and maintain locomotives and refurbish existing electric multiple units (EMU), Fan said.
He said Global Rail and its partners plan to restructure KTMB and transform it into a successful and self-reliant rail operator.
"We could arrange for rolling stocks leasing with affordable daily rental payments designed to stay within KTMB's operating budget.
"To complement this, we have also proposed a KTMB-Global Rail joint venture for railway infrastructure maintenance aimed at balancing cost with operational efficiency," Fan said.
Fan, who founded Global Rail in July 2008, previously headed ABB Daimler-Benz Transportation and later Balfour Beatty Rail Sdn Bhd for about 20 years.
Former KTMB managing director Datuk Mohd Salleh Abdullah is now Global Rail chairman.
KTMB has been a takeover target by several companies, including MMC Corp Bhd, which is controlled by Tan Sri Syed Mokhtar Albukhary.
MMC is proposing to privatise KTMB in a RM1 billion deal. However, the Railway Union of Malaya had objected to the selloff proposal.
KTMB has been bleeding red ink since 1992 but did post net profits of RM9 million to RM15 million from 1993 to 1995. Since then, it has been posting losses.
In 2011, the losses were almost RM200 million, which were attributed to high operating cost, low passenger and cargo fares, and a decline in the cargo business, which is its biggest revenue earner.
Business Times reported recently that KTMB would need up to RM7 billion to return to profit.
-btimes.com
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