Railway Assets Corp plans KTM cargo fleet refurbishment

PUTRAJAYA: The Railway Assets Corporation (RAC) has taken a significant step towards better optimisation of limited resources by refurbishing KTM Bhd’s fleet of old rolling stock for cargo operations instead of relying fully on outright purchases.

In a contract exchange ceremony here yesterday, the Transport Ministry said RAC would be roping in the private sector to refurbish 44 diesel locomotives.

“This development underlines the private sector’s commitment to supporting the sustainable development of rail-based cargo movements in the country,” said Transport Minister Anthony Loke.

He said this in his speech at the event here yesterday to kickstart RAC’s collaboration with homegrown rail equipment manufacturer, SMH Rail Sdn Bhd.

RAC is a government body in charge of optimising the country’s rail assets associated with KTM’s operations, ranging from land to rail network, and rolling stock to buildings.

In affirming the value of rail transport, Loke said this mode is a safe and sustainable option for moving goods efficiently.

The amount of cargo moved by KTM increased by 63.3%, from 198,857 TEU in 2020 to 324,764 TEU in 2022.

A TEU is a measure of volume in units of 20ft long containers, with one 20ft container equivalent to one TEU.In 2023, KTM obtained a revenue of RM112mil from cargo operations, which is nearly a quarter of its total earnings.

“Even though the government has given financial assistance to KTM for its maintenance, repair and overhaul of its rolling stock, the high demand has prompted calls for additional rolling stock to be added to the fleet.

“Arising from this, KTM has requested the government for additional rolling stock through purchases as well as refurbishments.

“In accordance with RAC’s rolling stock strategy, old locomotives and wagons that are in storage will be made fit for use through private sector involvement as a measure to achieve a sustainable rail transport ecosystem over a horizon of 30 years,” Loke said.

Following a request for proposal, SMH Rail came out tops by defeating three other bidders, and the agreement with RAC was signed on Feb 19.

According to Loke, these refurbished locomotives would be capable of hauling cargo for another 25 years.

“RAC will also replace 256 of its low-capacity wagons with those capable of moving heavier loads to allow for higher returns.”

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