KTMB Raising Cargo Rates In 2015

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KUALA LUMPUR, Nov 20 – After rail cargo rates remained unchanged for 32 years, KTM Bhd (KTMB) has shown some positive gains when it raised container and cement transport charges this year. To continue this momentum in earnings growth, KTMB will eke up container rates further next year, said president Datuk Elias Kadir today.

Even so, next year’s rail charges are expected to be competitive compared to other forms of road transport within Peninsular Malaysia, he added. Road transport charges are rising as highway tolls are widely expected to be raised as of January while the Causeway toll – where much of exported goods are taken into Singapore – had been raised last month.

“With this year’s increase in rail rates, the extra income plus improved efficiency in our operations has resulted in KTMB’s losses cut to less than RM100 million from RM140 million in 2013. “The new rates would help cut KTMB’s losses further to about RM50 million next year.” Higher cargo rates have complemented other cost-cutting efforts that have taken place at KTMB since 2012 when it posted a RM280 million loss then.

Elias said measures taken included avoiding stops at certain remote stations where no passengers were boarding or disembarking and reducing frequencies during off-peak hours. This move halved losses in 2013. Even so, he noted that KTMB continues to have many operational inefficiencies with train stops for just one or two passengers – resulting in high fuel costs to get the entire train moving again.

He said it is not very easy to solve such problems faced by KTMB due to legacy issues in the way it has been required to operate over the years, given that it’s a 128-year-old company. “But surely and slowly, we are overcoming the problems. Every employee is on-board with our transformation programme.” Stressing that no KTMB staff had been retrenched in recent times, Elias said the is working hard towards reducing losses to RM50 million by next year.

What makes the transformation process further challenging is that KTMB is simply the operator of the railway system, he noted. Also, passenger ticket prices are fully controlled by the government. “It has be realised that KTMB does not own any assets or building. All of it belongs to Railway Asset Corporation (RAC).” RAC is a federal statutory body under Ministry of Transport Malaysia. RAC was established under the Railways Act 1991. With RAC’s establishment, Keretapi Tanah Melayu – a public entity which dates back to 1894 – was disbanded and became KTMB.

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