TRANSIT comments on the Auditor General’s Report 2009

TRANSIT took note of the Auditor General’s Report, 2009 which made special mention of the problems at KTMB as well as the Dedicated Transport Service in Cyberjaya on pages 57-58 (55-56 of the .pdf).

1. Management Of Keretapi Tanah Melayu Berhad
a. The principal activities of Keretapi Tanah Melayu Berhad (KTMB) are to operate railway transportation and related railway services such as cargo, commuter and intercity services. With current economic development, KTMB had also implemented several other activities such as advertising; container rental; car parking and properties.

Audit on the principal activities from June to August 2009 revealed that generally KTMB had operated its business accordingly. However, it had incurred losses for year 2006 to 2008. In addition, there were several other weaknesses such as performance did not meet projected income and established Key Performance Indicators (KPI); train punctuality and rolling stock maintenance were not according to schedule; delay in overhauling Electrical Multiple Units; improper management of diesel subsidy and also delays in constructing and upgrading 5 stations in the East Coast.

b. KTMB’s mission to be the preferred land transportation system by providing safe, efficient and reliable integrated rail services for people and goods will not be achieved if the weaknesses were not rectified. In this regard, it is recommended that the relevant parties consider the following:

i. KTMB should take immediate action to ensure train punctuality; overcome weaknesses in rolling stock maintenance and related issues such as train safety and station environment that can jeopardise KTMB’s operation.

TRANSIT: Indeed – we have stated many times that KTMB should work on improving the station environment and customer service since the maintenance and purchase of rolling stock is out of its hands.

ii. KTMB should take appropriate action to dispose assets according to rules and regulations.

iii. The Internal Audit Unit of KTMB should conduct a detailed study pertaining to matters that will affect company’s financial performance such as outstanding debts, loan, advances and returns from investment in subsidiaries and subsubsidiaries
so that a report could be made to the Audit Committee for further actions.

iv. KTMB should review investment in subsidiaries and sub-subsidiaries to ensure good returns and to wind up immediately dormant subsidiaries and subsubsidiaries.

v. The Ministry of Transport should be firm with the contractors by imposing penalties for non-compliance to terms and conditions of contract.

2. Management Of Cyberview Sdn. Bhd.

a. Cyberview Sdn. Bhd. (Cyberview) was responsible for monitoring and ensuring that the development of Cyberjaya was in line with the Government’s aspiration and to advise the government on matters related to the Multimedia Super Corridor (MSC).

Audit on the management of Cyberview from July to November 2009 revealed that the group’s financial performance was good with 3 consecutive years of profits. Nevertheless, management of activities relating to land administration, monitoring of the development of Cyberjaya and transportation services were not satisfactory.

There were weaknesses such as no record on land status, ineffective monitoring of the development by Setia Haruman Sdn. Bhd., uneconomic and inefficient management of transportation services as well as rental income not accounted for accordingly. Besides that, there were other weaknesses in financial management such as no company policy and procedures on the main activities and poor management of payment, asset and human resource.

b. In order to overcome the weaknesses highlighted, it is recommended that the relevant parties take the following actions:

i. The Ministry of Finance should ensure Cyberview closely monitors the land administration and development of Cyberjaya and Setia Haruman Sdn. Bhd., the main developer of Cyberjaya, to submit to Cyberview a complete report on land matters and development of Cyberjaya.

ii. The Board of Directors should ensure that Cyberview regularly reviews the actual requirement of the Dedicated Transportation System and identify other alternatives which are more economical and efficient.

TRANSIT: We have, for a long time expressed our concern that the Dedicated Transport Service to Cyberjaya is  an inefficient use of public transport assets, namely long-haul Mercedes-SKS buses purchased for use on express bus services in the Klang Valley which spend a great deal of time sitting at Cyberjaya Transport Terminal during the day.

Given the large number of public transport operators and the large stock of available public transport vehicles (including express buses, excursion buses, tour buses, factory buses etc) there is no reason why the demand for public transport service to Cyberjaya and in Cyberjaya cannot be met using existing stock, rather than the long haul buses which were meant for use in the Klang Valley.

In addition, we feel that the Nadi Putra service, indirectly owned by the Putrajaya corporation, is in a better position to operate the Dedicated Transport Service and Cyberjaya shuttle buses.

TRANSIT Says:

We will follow up on the issues raised by the Auditor General’s report with two postings, about the DTS service and fixing the problems with KTM (and ensuring they never happen again).

For the moment, our comments to the above stand – we hope that Prasarana and Cyberview Sdn. Bhd. will reconsider the Dedicated Transport Service so that public transport assets are better managed.