Published January 29, 2009

Malaysian state railway does not need privatisation, says MD

Completion of the double tracks allows it to run more trains

	Email this article
	Print article
	Feedback

(KUALA LUMPUR) Malaysia's national railway company, Keretapi Tanah Melayu Bhd (KTMB), does not need to be privatised in order to be profitable or to progress, its managing director Abd Radzak Abd Malek said.

The inside track: KTMB's managing director welcomes the entry of a second railway operator in the local market, even if this means breaking the long-term monopoly enjoyed by KTMB

'A privatised institution is not necessarily better than a state-owned one. Take Queensland Rail (QR) for example. It continues to be profitable,' he said in an interview with Malaysia's Business Times newspaper.

QR, which was corporatised in 1995, is a government-owned operator of passenger and freight railway services in Queensland, Australia.

'As such, I don't agree with the comment that the only way we can progress is to privatise,' said Mr Abd Radzak.

'For me, as long as it (KTMB) serves the needs of people in the country, has a responsibility to society and is an effective public transport system, it can either be a corporatised government-owned corporation or privatised. These are purely methods,' he added.

Former KTMB managing director Mohd Salleh Abdullah had, in an April 2007 interview, said that the privatisation of KTMB can succeed and make the railway profitable if the government liberalises the Malaysian rail industry, especially on tariffs and unprofitable routes.

Similar to the port and airport industries, KTMB has to seek approval from the government before it can make changes to its tariffs. This process can take years.

Meanwhile, Mr Abd Radzak said that he welcomes the entry of a second railway operator in the local market, even if this means breaking the long-term monopoly enjoyed by KTMB.

Transport Minister Ong Tee Keat had announced last December that his ministry was considering introducing a second railway operator.

'In the long run, when you have the infrastructure (of the double-tracking rail project) ready, you cannot stop another private operator from entering the market,' Mr Abd Radzak said.

'For instance, if there are entrepreneurs who would like to operate freight or passenger train services, they can ride on our network. In return, we would collect toll fees from them. This idea is workable especially when the double-tracking project is completed.'

The double track between Rawang and Ipoh is now fully completed, while the Ipoh-Padang Besar and the Seremban-Gemas sectors will be completed in 2012.

The double track is crucial to KTMB as it will increase the track capacity by eight to 10 times.

Currently, the capacity of a single-track railway line is between 25 trains and 28 trains per day per sector, while the central region sector (Seremban-Rawang and Sentul-Port Klang) and the sector between Rawang and Ipoh, both of which are double-tracked and electrified, have an average of 307 trains running daily.

'Upon completion of the double-tracking project, we would have a lot of capacity to accommodate more trains. And we, at KTMB, have our limitations too (in terms of equipment and resources),' said Mr Abd Radzak.

'As such, we are open to the idea of liberalising the track access for usage of a third party operator, who will be paying us a fee to access our tracks.

'They would have their own wagons and locomotives, and would have to secure their own freight volume and passenger ridership.'

Still, this proposal needs government approval.

Mr Abd Radzak said that he currently chairs a task force, of which the special adviser to the transport minister is also a member, to look into this matter.

'This proposal remains in the preliminary stages. We are also looking at several other models around the world as part of the restructuring of KTMB,' he added.

In answer to a question, Mr Abd Radzak said that construction of the new track between KTMB's existing Labu train station and the new low-cost carrier terminal (LCCT) in Labu, Negri Sembilan, will be funded by the private sector but stopped short of saying whether it was AirAsia Bhd or Sime Darby Bhd.

Both AirAsia group chief executive officer Tony Fernandes and Mr Abd Radzak had earlier confirmed having discussions on the rail link project.

'AirAsia can leverage on our low-cost transportation, while we can tap into AirAsia's passenger traffic that will pass through the new LCCT,' said Mr Abd Radzak.

The completion of the new LCCT will also coincide with the delivery of KTMB's five electric train sets (ETS) scheduled to arrive in 2010.

'Low-cost travellers can then take our shuttle train service from Ipoh to Kuala Lumpur and travel onwards to Labu,' he added.

Plans are also afoot to extend the Ipoh-Kuala Lumpur line to Singapore upon completion of the double-tracking project, subject to government approval, thus attracting more travellers to fly through the new LCCT.