What is the future of KTM?

With much recent attention on new public transportation projects such as the LRT Line 3, the MRT Lines 2 and 3, the East Coast Rail Line (ECRL) and the KL-Singapore High-Speed Rail (HSR), Keretapi Tanah Melayu (KTM), the oldest major railway operator in Peninsular Malaysia, has been largely ignored even though it provides important connectivity within the Klang Valley and is a major form of inter-city public transportation.

This report analyses the financial performance of KTM Berhad, based on various components of its revenue stream. These include its intra-city commuter services, electric train services and intercity services. The impact of the Railway Network Access Agreement (RNAA) on KTM will also be studied, along with other challenges such as infrastructure upgrades, service disruptions, competition from other public transport operators and non-integration with other rail operators in the Klang Valley.

Together, the analysis reveals several financial and operational difficulties facing KTM as a going concern.

Although KTM’s Electric Train Service (ETS) has been a bright spark in drawing revenue and future prospects for this service appear positive, these are diminished by other serious challenges facing KTM, such as increasing costs, deferment of debt repayments, increased competition from public transport operators, and an expected increase in competition from other train operators arising from the RNAA, to name a few.

The report concludes with several recommendations to improve KTMB’s financial and operational prospects and ensure its survival moving forward. In particular, priority should be given to reconfiguring and realigning the railway company’s operations and operating structure so as to maximize profits from its fare and non-fare revenue. A review of the RNAA should also be conducted and where necessary, adjustments made to its terms in order to support a more efficient management of KTM’s operational expenses.

Media Statement by Dr. Ong Kian Ming, Head of the Penang Institute in Kuala Lumpur on the 13th of March 2018

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