Train services and railway coverage in Malaysia are set for a facelift with the leasing of 62 new passenger train sets from China by 2027, says Transport Minister Anthony Loke.
During a joint press conference with Economy Minister Rafizi Ramli on Wednesday (Aug 14), Loke said the estimated RM10.7 billion leasing deal is part of a government-to-government (G2G) initiative, paid in installments over 30 years.
Meanwhile, Rafizi said the government aims to reach 80% railway track utilisation in Peninsular Malaysia by 2030, with a phased plan to increase passenger train services, targeting 299 trains nationwide by 2030.
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During a joint press conference with Economy Minister Rafizi Ramli on Wednesday (Aug 14), Loke said the estimated RM10.7 billion leasing deal is part of a government-to-government (G2G) initiative, paid in installments over 30 years.
Meanwhile, Rafizi said the government aims to reach 80% railway track utilisation in Peninsular Malaysia by 2030, with a phased plan to increase passenger train services, targeting 299 trains nationwide by 2030.
Read more at https://tinyurl.com/y6fj5j4t
WATCH MORE: https://thestartv.com/c/news
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LIKE: https://fb.com/TheStarOnline
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NewsTranscript
00:00The meeting this morning, we have a Memorandum of Understanding from the Ministers,
00:19which was submitted by the Ministry of Transport.
00:23However, after discussion and decision-making
00:27through the National Economic Action Council,
00:30and after consulting with the Ministry of Economy,
00:33we have come up with a new proposal
00:37on the implementation of train trains
00:41with more impact.
00:44One of the reasons is that the optimum
00:48or the use of trains in our country
00:51is still at an unoptimum level,
00:53which is still low.
00:55The government has spent tens of billions
00:58to build train platforms
01:01and raise the level of our platforms
01:03to be double-tracked and electrified
01:05across the whole of the South China Sea,
01:07from the North to the South,
01:09from Padang Besar to Gemas.
01:11It will be fully double-tracked,
01:13electrified by next year.
01:15Because the Gemas JV will be ready
01:18by next year.
01:20And throughout this time,
01:22the government has spent a lot of money
01:25to raise the level of this platform.
01:28However, the use or the optimization
01:31of the railway track is still low,
01:34at only 30% level of optimization.
01:37One of the reasons is that
01:39we have a shortage of rolling stock,
01:42a shortage of set trains,
01:44which is not enough.
01:46And every year,
01:48if we want to add more set trains,
01:50it becomes a big challenge for the government.
01:53Because, first of all,
01:55it is not every year that we can add set trains.
02:00And secondly, we need to spend a lot of capex
02:03every time we make an optimization.
02:06After discussing with the Ministry of Economy
02:09and having been discussed
02:11at the National Economic Action Conference,
02:14the Ministry of Transport will raise a new suggestion,
02:17which is to increase the quality of public transport.
02:20We have decided to implement a new strategy,
02:23the acquisition of passenger train assets
02:26for the PKTMB train line,
02:28with a tax system or leasing,
02:31through the government-to-government mechanism
02:35between the Malaysian government
02:37and the People's Republic of China, PRC.
02:40In this first phase,
02:42from 2024 to 2027,
02:45the implementation of this initiative involves
02:48the addition of 62 new passenger set trains,
02:51with a cost estimate of 10.7 billion ringgit,
02:55which will be paid in installments
02:57for a 30-year tax period.
03:00The actual cost will be determined
03:02after the negotiation with the government
03:04at the People's Republic of China
03:06in the near future.
03:08For now,
03:09almost 90% of passenger trains
03:11in the KTMB service line
03:13are made by the China Railway and Rolling Stock Corporation,
03:17or CRRC,
03:19which is a PRC-owned company.
03:22The CRRC company is the pioneer
03:24of the passenger train industry
03:25in the global market,
03:27in terms of technology
03:28and in terms of business results.
03:30The taxation is based on several themes,
03:34as follows.
03:35First,
03:36the Malaysian government
03:38will have a majority stake
03:40in the CRRC Rolling Stock Center,
03:42or the entity approved by both governments.
03:47Second,
03:48the CRRC will have to meet
03:50at least 40% of the local content requirement,
03:54the need for technological transformation
03:56and local energy involvement.
03:58As a background,
04:00it is generally known that
04:01passenger trains,
04:02especially for ETS and KTM computers,
04:05face various challenges
04:07in terms of over-reliability
04:08and reliability.
04:11Referring to the current situation,
04:12the total number of trains
04:13in a reliable service
04:15is only 68 sets.
04:20Without immediate improvement,
04:22the KTMB service line will continue to deteriorate.
04:26In fact, there is a need
04:28to increase the number of passenger trains
04:31for each service route
04:33offered on the side
04:34to ensure that each passenger train
04:36is in good condition at all times.
04:40The addition of 62 sets of passenger trains
04:42in this first phase includes
04:4536 sets of 3-car sets, EMU,
04:4912 6-car sets, EMU,
04:52and 14 sets of 6-car sets
04:54Diesel Multiple Units, or DMU.
04:57The benefit of this method
04:59is that the cost of taxes
05:00includes all levels of maintenance,
05:02repair and repair, MO,
05:04by entities that provide trains
05:06for tax rates.
05:09Scheduled maintenance
05:10carried out in a structured manner
05:12by OEMs
05:15will ensure the availability
05:17and cost of the train set
05:19at the next level.
05:21This can directly ensure
05:22that the train operation
05:23is more efficient and safe
05:25for the convenience of the public.
05:27In addition, the tax rate
05:28will also help to plan
05:30a more organized cash flow
05:32for the government.
05:34One of the important elements
05:35that we want to ensure
05:37is that our trains,
05:39our set trains,
05:41are well maintained
05:43and in good condition.
05:45At this time,
05:47our procurement model
05:49is that we buy a set train,
05:51but when we purchase it directly,
05:55it does not include a package
05:57for MO or maintenance.
06:00So every few years,
06:02we need to go back
06:03to the Ministry of Economy
06:04and the Ministry of Finance
06:05to request a package
06:07for MO.
06:09Sometimes, it does not meet the schedule.
06:11This causes the cost of the train
06:13to decrease.
06:16With this new model,
06:18we will solve this issue.
06:21This means that we no longer need
06:23to request additional packages
06:25for maintenance.
06:27The cost and the maintenance package
06:30will be included in this process.
06:34So it will be a long-term step.
06:39Procurement methods can also be done
06:41more quickly
06:43compared to conventional train procurement.
06:45In addition to increasing the cost of maintenance,
06:47the use of track utilization
06:50is expected to be increased
06:52from 30% to 45%
06:54by 2027.
06:58As mentioned by Mr. Lok,
07:0170% of the total capacity
07:05of passenger trains in this country
07:08is not used at this time.
07:10Only 30%.
07:12Meanwhile, in terms of investment
07:14to build the expanding track,
07:17I remember 15 years ago,
07:21the government has spent
07:22more than 20 billion.
07:24We spent a lot of money
07:26building double-tracking,
07:27but we did not have the coaches.
07:31So far, only 68 passenger trains
07:34operate throughout the country.
07:38While the target set
07:40in the National Transport Basis
07:43for 2019-2030
07:46is to achieve a target of 40%
07:48of public transport use
07:51by 2030.
07:53The government,
07:55which will be governed
07:57by the Ministry of Transport,
07:59will continue to use the decisions
08:02made today
08:04to build a long-term plan
08:06to increase the cost
08:08of passenger trains in Malaysia
08:10by phase between 2024-2030
08:14and target the number of passenger trains
08:17operating throughout the country
08:19to reach 299 passenger trains
08:22from the current 68.
08:24So we are at 68 now.
08:26We have about 5 years.
08:28One of the ways,
08:30as YB Lok mentioned,
08:32is we will operationalise leasing
08:36because through leasing,
08:38we will be able to scale up
08:44coaches towards 299 targets
08:47by the end of the decade.
08:49And the initiatives that have been
08:51announced will be implemented
08:53in a balanced manner
08:56not only to ensure that
08:58the implementation goes well
09:00but also to ensure
09:03that our cash flow is correct.
09:06And God willing, all of this
09:08will be one of the main pillars
09:12in the 13th Malaysia Plan
09:15which is currently being built
09:18and God willing, will be implemented
09:21in July next year.
09:23And the leasing will complete
09:26the Government's financial commitment
09:30for 2026-2030
09:34which will include railways
09:37between the cities in the South East
09:40and also increase the cost
09:42of passenger trains in Lembah Kelang.
09:45The lease programme that we are looking at
09:47for first phase from 2024-2027,
09:51we are looking at 62 sets currently
09:54at S$10.7 billion over 30 years.
09:57So it's not one shot that we are paying S$10 billion.
09:59It's over 30 years.
10:01So the lease model enables us
10:03to plan our cash flow better.
10:05So because it's spread out,
10:07every year we are looking at about S$300 million
10:09so over 30 years.
10:11So if we are not looking for this initiative,
10:14then it will never happen that
10:17we can scale up at one go.
10:19We can never spend S$10 billion in one year
10:23to get that 60 plus coaches.
10:26Can you estimate how much the Government can save
10:30through this lease?
10:32We don't look at it from the perspective of savings,
10:37but more to reliability.
10:40Reliability and also scale up.
10:42What is happening now is our consideration
10:44is that we are facing a problem
10:46that the train set is not enough.
10:48We have a lot of complaints about computers.
10:50Computers, one hour, one trip,
10:52wrong time, and so on.
10:54For the simple reason,
10:56our train set is not enough.
10:58Secondly, ETS.
11:00ETS is very popular.
11:02ETS, every week, weekend,
11:04from Kuala Lumpur to the North,
11:06every weekend is sold out.
11:08The problem is we don't have enough trains.
11:10We don't have enough sets.
11:12We want to add more.
11:14Landasan can run more,
11:16but we don't have a train set.
11:18So, what do we do?
11:20If we ask for a budget every year,
11:22as I mentioned,
11:24the Ministry of Economy has to prioritize.
11:26Not just the Ministry of Transport,
11:28every ministry has to ask for it.
11:30Some ask for more schools, clinics, hospitals,
11:32we ask for more trains, buses, and so on.
11:35So, how do you go about a scale up at one go
11:39with the current situation?
11:42Because we have a construction order,
11:45there is a ceiling.
11:47So, we come up with this initiative,
11:49we discuss with the Chinese government
11:51whether we can have this kind of effort
11:53between G2G.
11:55This matter was discussed
11:57during the visit of the Premier of China,
11:59Li Qiang, to Malaysia recently.
12:01In principle,
12:03China welcomes it well
12:05and they already have a presence here.
12:07So, we are looking at the longer term relationship
12:09and we also want to take part
12:12in the construction of the factory.
12:15Because right now, it is 100% owned by the Chinese.
12:17So, under this agreement,
12:19under this negotiation,
12:21we are taking over 51% of the facilities in Malaysia.
12:24So, we want to have the same effort
12:26so that there is also technology transfer
12:28and we also want to make sure
12:30that we can train up the locals to know about this technology.
12:32You mentioned that Malaysia will have a 51% stake.
12:36Where is it going to be manufactured?
12:39It is already a facility in Batu Gajah
12:41owned by CRRC.
12:43That facility, as I mentioned right now,
12:45is 100% owned by CRRC.
12:47So, with this arrangement,
12:49we are negotiating with the Chinese
12:51with the Chinese side
12:53that we also take part
12:55in the ownership
12:57of the rolling stock facilities
12:59in Batu Gajah.
13:01One of the conditions is that all the cars
13:03have to be assembled here,
13:05have to be assembled in Batu Gajah.
13:07Because the moment we scale it up
13:09and give more confidence to the Chinese side
13:11to put more investment here
13:13and also with us having a stake,
13:15what we aspire to do is that
13:17this centre in Batu Gajah
13:19not just manufacture
13:21and assemble train sets
13:23for the Malaysian market,
13:25but even for the entire ASEAN.
13:27So, in fact,
13:29CRRC, the only plant outside China
13:31they have is in Malaysia, in Batu Gajah.
13:33So, when are you signing?
13:35We just got the
13:37cabinet approved
13:39to negotiate.
13:41Of course, we are looking at the next
13:43few months. As we have mentioned
13:45that the first phase we are looking at
13:472024 to 2027.
13:49So, we expect all these trains,
13:51all these additional trains
13:53can arrive in Malaysia,
13:55can arrive and can start operational
13:57by 2027.
13:59Because we are looking at a very short time frame
14:01to scale up.
14:03The biggest challenge right now for us is that
14:05while we want to shift the public
14:07towards public transport,
14:09we need the infrastructure, we need the rolling stocks,
14:11we need the train sets.
14:13So, every day we are talking about
14:15asking the public to go on
14:17public transport.
14:19Public transport is not just about LRT and MRT,
14:21we also look at interstate
14:23and commuter.
14:25Commuter is one of the major ones.
14:27Imagine if our commuter has
14:29additional services,
14:31those who are living in Seremban
14:33can take a commuter, work in KL.
14:35Those who are staying in Klang,
14:37I mean, a lot of people are doing that as well.
14:39But right now, a lot of complaints say that
14:41they can't do it,
14:43or they don't want to take
14:45the train because it takes 2 hours.
14:47From Seremban
14:49to KL, if you use a commuter,
14:51it takes 2 hours. Or Klang to KL.
14:53Or Tanjung Malib.
14:551-2 hours.
14:57So, with this additional train set,
14:59we can cut down the time,
15:01the interval, and also
15:03have more additional capacity.