Will KTMB’s ambitious plan work?

Will KTMB’s ambitious plan work?
January 20, 2009
from the Malay Mail http://www.mmail.com.my/Will_KTMB’s_ambitious_plan_work-e-.aspx

Keretapi Tanah Melayu Bhd (KTMB) managing director Abd Radzak Abd Malek has unveiled an ambitious plan to turn his ailing company around: This year, the national railway hopes to post a profit of RM1, which is no mean feat considering that it reported a net loss of RM116.1 million in 2007.

Last year’s figures are not yet available, but there is a disturbingly long-established trend: Transport Minister Datuk Seri Ong Tee Keat said in Parliament last year that the company had sustained an average annual loss of RM100 million from 2003 to 2007— and this translates into a loss of about RM300,000 a day for the entire period.

A decisive turnaround strategy has been critical for years, and Abd Radzak has indicated that his plan will require corporate rebranding, human capital development and capacity-building. He has also set up project taskforces and has asked senior managers to return after hours to work on the company’s many problems.

In May last year, a Malay Mail exposé found that the 192km Rawang-Ipoh double track, which cost RM4.8 billion to build, was not being used because there were no trains for it — new trains will be delivered this year, and the service will start only next year.

Meanwhile, trains operating on the peninsular west coast were found to be sub-standard: In 2005, KTMB spent RM200 million to import 20 locomotives from China, but only five were left in service last year — the rest had broken down and were mothballed.

To cope with the existing load, KTMB resorted to leasing 15 locomotives from India at a rate of US$1,000 (RM3,570) per train per day, which at today’s US dollar exchange rate translates into a cost of about RM20.5 million a year.

We also found out the reason why city trains were massively overcrowded: Only 21 of KTMB’s fleet of 62 trains in the Klang Valley were operational. Some had been decommissioned as a result of accidents, others were being cannibalised for parts, yet others were held up for repairs.

These trains were housed at KTMB’s Sentul Works — a historical depot built in 1905 — but this too was being relocated to make way for property development. Sentul Works has, however, been in a state of general disrepair in recent years and has earned it an unfortunate epithet: Train Graveyard.

It was under these circumstances that Abd Radzak was appointed to his current position in September last year, and we wish him every success in his plans for the company.

The rail operator’s problems, however, clearly go beyond corporate efficiency. Its services do not lack users — many have no choice but to take the public transport, and more may do so if a recession kicks in.

What it lacks are well-maintained trains and strategies like rebranding will achieve little if KTMB’s underlying services do not improve.