Joint venture to manage Klang Valley public transport


BY K.P. LEE AND SIDEK KAMISO

THE Government has appointed a new joint-venture company (newco) to manage the public transportation system for the Klang Valley that includes the city bus services operated by Park May Bhd and Intrakota Komposit Sdn Bhd as well as the PUTRA and STAR light rail transit (LRT) operations. 

Ending weeks of speculation, the Prime Minister’s Department said yesterday the newco formed by the consortium, comprising Datuk Mohd Nadzmi Salleh, KL Infrastructure Group Bhd (KLIG) and KUB Holdings Bhd with equity split of 40:40:20 respectively, would become the master operator of the system that carries over 80% of the commuter traffic into the federal capital. According to sources, the concession would be for a period of at least 10 years, but not exceeding 30 years.  

Tan Sri Mohamed Yakop

The Government also announced that a single integrated transport regulator known as the Klang Valley Urban Transportation Board would be established to oversee the operations and development of the public transportation system in the federal capital, currently under the jurisdictions of nearly a dozen ministries and government departments.  

As master operator, the newco would lease the trains and buses from government-held Syarikat Prasarana Nasional Bhd that now owns all the assets in the system.  

Prasarana this month completed the purchase of the city buses from Park May and Intrakota's parent DRB-Hicom Bhd and had been running the PUTRA and STAR lines since September last year. 

It is understood that the financial arrangement being proposed is modelled on that first pioneered in Malaysia Airlines' widespread asset unbundling exercise last year which separated asset owner from operator.  

This would free the commercial operator from the high cost of financing for capital and infrastructure development. 

It is believed the two bus operations and two LRT lines turn in profits at the operating level – raking in some RM430mil in revenues in total annually against operating costs of about RM400mil – but are not able to cover their financing costs.  

The consortium members are all established public transportation operators or have had such experience in the past. Nadzmi heads Nadicorp Holdings Sdn Bhd that runs a fleet of 1,200 buses plying national routes while KLIG is owner-operator of the KL Monorail. KUB’s chief executive Che Khalib Mohd Noh, meanwhile, had been the former executive council chairman of KTM Bhd.  

When contacted yesterday, a KLIG official said the company had yet to receive the letter of award. However, he confirmed the consortium was still in talks with the government to determine the leasing rates for the assets. 

Since July, a steering committee, comprising the Economic Planning Unit of the Prime Minister’s Department, Finance Ministry, Transport Ministry and Entrepreneur Development Ministry, had been coordinating the efforts leading to the selection of the consortium. 

When contacted by StarBiz, steering committee chairman and special economic advisor to the Prime Minister Tan Sri Nor Mohamed Yakcop said the group’s timetable for asset acquisition and selection of a new master operator was on schedule. 

He said the operations for the new entity should start by April next year and the new transport board is expected to be in place by April 2005. 

Nor said the new structure would ensure greater efficiency and effectiveness in the future. 

Acknowledging that Kuala Lumpur’s public transport system of multi-operators and uncoordinated development and operations in the past was far from perfect, Nor said he was “fully aware of the need to improve the system.” 

He said that with some RM14bil invested over the past 10 years in the Klang Valley’s rail infrastructure, the way forward was for the integration and streamlining of the operations.  

He said there wouldn’t be a need for additional capital investment except “an incremental amount” to improve scheduling, routings, connectivity and introduce a common ticketing system. 

Nor said the other public transport operators like KL Monorail, KTM Komuter and bus lines Metrobus and Triton would continue to be run independently. However, an integration agreement would be signed between Prasarana and these parties to ensure that their operations were coordinated with that of the master operator. 

Compared with the master operator, they control a relatively small share of the market.  

Park May and Intrakota buses have between them up to 80% of the total daily bus ridership while PUTRA and STAR have total daily ridership of 165,000 and 100,000 respectively compared with 60,000 for KTM Komuter and 25,000 for KL Monorail. 

Govt plans better public transportation by 2005

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