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Wednesday, 11 January 2017

KTMB conducts inquiry over multi-million ringgit procurement deal

PETALING JAYA: Keretapi Tanah Melayu Bhd (KTMB) is undertaking an internal probe into a procurement deal involving millions of ringgit.

President of the railway body, Datuk Sarbini Tijan, has been told to go on leave pending the outcome of an inquiry.

When contacted by StarBiz, KTMB chairman Datuk Nawawi Ahmad confirmed that an investigation was ongoing.

He also confirmed that Sarbini was on long leave pending the conclusion of the probe.

To a question on whether the president was being investigated and that was the reason why he was on leave, Nawawi replied “yes”.

When contacted, Sarbini, however, denied any wrongdoing and claimed he was being unfairly targeted. He said there was no fraud involving procurements under his leadership at KTMB.

In the absence of Sarbini, the railway operations is being handled by the general manager for procurement Mohd Hider Yusoff.

Nawawi said the board of directors had approved the appointment of Hider who will be in charge temporarily.

Hider is a seasoned railway man, having served with KTMB for almost two decades.

Apart from the president’s position, three of the four senior vice-president positions are also vacant.

Nawawi said the positions had been vacant for more than a year and that KTMB would be seeking to fill them next year.

Nawawi, who is also the MP for Langkawi, said previous senior vice-presidents were not under investigation for alleged fraud.

The three positions are the senior vice-presidents for finance, corporate services, and business and operations.

It has been reported that the internal investigations commenced following a procurement worth millions of ringgit that was apparently done without KTMB’s board of directors’ approval.

Earlier last month, Sarbini denied being involved in any investigation.

In November, it was reported that KTMB general manager for talent management and organisational development Hilmi Hasan had sent an email to all employees of KTMB indicating a change at the management level.

This is not the first time that KTMB is embroiled in such allegations. In 2011, the Malaysian Anti-Corruption Commission initiated an investigation into the rail operator following allegations of irregularities in its award of a tender involving the revamp of its multi-million-ringgit ticketing system.

It was reported that the bid by the company that was awarded the project was higher than two other bids from companies that were supposedly more experienced.

The loss-making railway service operator was corporatised in 1992 but it has not been able to financially sustain itself, resulting in the deterioration in its level of service despite attempts to turn around the company.

According to KTMB’s latest publicly available audited report for financial year 2013, the group registered a total net loss of RM128.2mil. However, the net loss had narrowed by 46% from RM238.5mil in the previous year.

In 2012, KTMB initiated its three-year turnaround plan, which was projected to propel it into profitability.

Nawawi said KTMB was on track to achieve the objectives of the turnaround plan and expressed optimism about the railway operator returning to the black.

“KTMB is expected to break even this year and will start registering profit from next year,” he said.

Last week, Nawawi said KTMB suffered an annual loss of RM50mil due to cheap ticket fares set by the Land Public Transport Commission (SPAD). He said the rail operator would be able to break even if it was allowed to increase the KTM Komuter fare by two sen per km.

KTM Komuter fares saw an increase of 36% effective since Dec 2 last year, following an approval from SPAD, by four sen per km to 15 sen per km for the Tanjung Malim-Sungai Gadut and Batu Caves-Port Klang routes.

Related story:

Confusion reigns at KTMB top management

Tags / Keywords: Economy , Earnings , Corporate News , KTMB

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