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 Friday (Mar 15), the Transport Ministry said RAC would be roping in the private sector to refurbish 44 diesel locomotives.
"This development underlines the commitment of the private sector in supporting the sustainable development of rail-based cargo movements in the country," said Transport Minister Anthony Loke in his speech at the event here 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 Bhd's operations, ranging from land to rail network to rolling stock to buildings.
In affirming the value of rail transport, Loke said this mode was a safe and sustainable option for moving goods in an efficient manner, and one that was not subject to road traffic congestion.
Transporting cargo was one of the rare areas of KTMB's operations that actually generate profit for the largely loss-making group, with the amount of cargo moved by KTMB increasing by 63.3%, from 198,857 TEU (20-foot equivalent unit) in 2020 to 324,764 TEU in 2022.
A TEU is a measure of volume in units of 20-foot long containers, with one 20-foot container equivalent to one TEU.
In 2023, KTMB obtained a revenue of RM112mil from cargo operations, which was nearly a quarter of its total earnings.
"Even though the government has given financial assistance to KTMB 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, KTMB 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," he 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.
Also present at the event was Loke's deputy, Datuk Hasbi Habibollah as well Transport secretary-general, Datuk Jana Santhiran Muniayan, who was also RAC chairman.
"RAC will also replace 256 of its low-capacity wagons with those capable of moving heavier loads to allow for higher returns," he said.
