Return railway land and assets to KTMB

I am going to talk about KTMB, the elephant in the room which many people notice but never talk.

According to the Auditor-General’s Report 2018 released last year, this entity owned by the finance ministry (MoF) has had accumulated losses of RM2.83 billion up to the end of the last financial year, 2018.

Yes, KTMB, which failed to be privatised under Dr Mahathir Mohamad 1.0, was temporarily placed under MoF, as it was and still is, 100% owned by the government.

For some administrative and budgetary reasons, it has not gone back to the transport ministry (MoT), its original ministry, even though its main role and function is to provide transport services for passengers and freight.

Due to the privatisation policy drafted at that time, the rail body was broken into two parts; KTMB as the rail service operator and Railway Assets Corp (RAC), a new body formed purely to own all the railway land, stations and immovable assets, plus the responsibility to maintain them.

Over the years, instead of pursuing the objectives of privatising KTMB operations for better customer service and to reduce government expenditure, the politicians in charge at that time conveniently “privatised” some of the lucrative railway lands under RAC instead.

KL Sentral and Sentul railway land are two prime examples of how railway land located in strategic areas of KL have gone into the private sector’s hands.

Though these two sites are impressive, the developers instead of KTMB, were the ones that raked in massive profits.

The rail operator, KTMB, which originally owned the land, struggled to make ends meet and could not and still cannot even cover the railway’s operating expenses.

To make matters worse, the space left for rail operations at KL Sentral is so small, an equivalent space of about two double tracks lines which are also being used for trains to stop for embarkation and disembarkation of passengers.

No space has been left by the joint venture partners for future expansion.

KL Sentral has caused huge hindrance to freight train operations and it has since become a serious bottleneck. The alternative to this problem is to create a new by-pass line from Port Klang to the north and south.

Single body

Revenue from ticket sales, even though increasing yearly due to increase in demand, has not been sufficient to pay for the operating expenditure which includes track maintenance, the latter of which, by right, should be borne by RAC which directly owns the assets.

The fundamental point here is that this temporary framework of having KTMB under MoF and RAC under MoT, was meant for the privatisation of KTMB.

When it didn’t happen, the framework should have been dismantled and KTMB and RAC be reverted to the pre-privatisation era.

They should operate as a single body under MoT and not continue as two separate bodies.

It is rather unfair that the operating company KTMB, which provides public services, is losing money whereas the assets holding company, RAC, is freely making money on the side, without having the responsibility of any contribution to the rail maintenance costs.

At the moment, RAC is independently entering into property development agreements with private sector companies in the name of Transit-oriented Development (TOD). All these developments will have a great bearing on rail travel demand which KTMB has to fulfil.

It would only be fair, therefore, that KTMB be part of this development process and also benefit financially so that any resultant increase in their future operating costs, could be offset or subsidised by the respective TOD.

Over a larger issue in dealing with traffic planning, any substantial property development that would eventually lead to a creation of new urban centres would ultimately require railway connection in order to service the community at large and their demand for mass commuting into and out of KL.

The failure in not adopting this approach in the planning for a rail-based strategy could clearly be seen in today’s road traffic congestion, especially along the corridors where rail networks are actually available but not utilised.

Such places include rail corridors not only in the Klang Valley but also in Seberang Perai, southern Johor and also the Kajang-Putrajaya link. These are places where local passenger rail services could be redesigned to complement or be offered as an alternative mode to the local road transport.

In light of this, KTMB should, therefore, be redesignated to also play this railway planning role so that their services, passengers or freight, could be redesigned from the start. RAC alone cannot be trusted with this role and property development has too many other diversions especially as it is intertwined with price and profits.

KTMB should be given the responsibility to plan any TOD development so that it could better suit their rail network planning strategy.

At the same time KTMB could utilise the development of their land banks for the purpose of tapping into the property revenue to cross-subsidise their passenger or freight operations costs.

For all these reasons, it would be best for all the stakeholders to bring back RAC and combine it under one roof with KTMB and at the same time revert this original body back to be under MoT.

By then, KTMB should be sufficiently attractive and beautiful enough to be privatised.

The views expressed are those of the author and do not necessarily reflect those of FMT.

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