KERETAPI Tanah Melayu Bhd (KTMB) is looking to increase its revenue from non-rail operations and has identified a few potential areas, said chief executive officer Datuk Kamarulzaman Zainal.
He said KTMB is eyeing government acquisition and project management services as well as maintenance, repair and overhaul (MRO) services.
“We are also looking at securing projects that the government plans to outsource, in addition to raising revenue from advertising,” he told the New Straits Times.
KTMB’s non-rail business, such as leasing advertising space, contributes less than three per cent
to total revenue.
Its main business is focused on intercity train, KTM Komuter, electric train service and cargo services.
The NST had reported that KTMB was looking to develop land along the railway tracks and around its stations, which had the potential to generate more than RM30 billion in gross development value.
KTMB wanted to develop integrated projects either through a public-private partnership or joint venture with property developers. The company was eyeing a business model similar to Mass Rapid Transit Corp Sdn Bhd (MRT Corp) and Prasarana Negara Bhd.
Not only are MRT Corp and Prasarana building and operating their MRT and light rail transit lines, but they are also jointly developing land with property developers to grow their revenue.
KTMB has been asking the government for a master lease agreement to share the assets, including land and stations parked under Railway Assets Corp, for development. These assets had belonged to KTMB prior to the company’s privatisation in 1992.
The previous management of KTMB had said the company needed to generate more than RM700 million in revenue a year to earn a profit.
According to the Auditor General’s Report, KTMB had an accumulated loss of RM2.83 billion
as of Dec 31 last year.
KTMB will be pushed into the red again this year as its two main services had recorded losses of
between RM39.82 and RM77.76 million from 2016 until July this year.
Kamarulzaman said KTMB’s non-rail business will be the way forward to return to profitability.
He said KTMB needs to aggressively find other sources of income to reduce its operational loss since rail revenue will be severely affected by the ongoing Klang Valley electrified doubletrack upgrading project, which will be completed in five years.
“KTMB’s rail revenue is highly dependent on government allocation and a better mechanism has to be put in place to ensure consistent payment to cover the actual loss involving uneconomic routes.”
With regard to operation of electric trains, Kamarulzaman said KTMB can reduce its operational cost provided that the government introduces special electric tariff for public transport service providers.