Massive restructuring plan for Malaysia's biggest urban public transport asset owner

  • Mini-sub begins seventh dive as search goes on for MH370
    Mini-sub begins seventh dive as search goes on for MH370

    The autonomous underwater vehicle Bluefin-21 has started its seventh mission after its previous dives failed to yield any positive results in the search for Malaysia Airlines flight MH370 that is ongoing in the Indian Ocean, said a statement from the Joint Agency Coordination Centre (JACC) this morning. The statement said Bluefin-21 has... …

  • Langkawi MP unrepentant, continues insults on late Karpal, says Facebook user
    Langkawi MP unrepentant, continues insults on late Karpal, says Facebook user

    A Barisan Nasional MP whose Facebook posting poking fun at the death of Karpal Singh shocked Malaysians has again insulted the late DAP leader, this time comparing him to a hostile figure in Islamic history who fought against Prophet Muhammad. Facebook user Shamsul Kamal Ariffin Mohd Nasir, 42, told The Malaysian Insider that Langkawi MP,... …

  • As Shariah Court flexes muscle, lawyers warn of creeping Islamisation
    As Shariah Court flexes muscle, lawyers warn of creeping Islamisation

    KUALA LUMPUR, April 19 — Lawyers have expressed concern about the gradual invasion of Shariah law into areas beyond Muslim family matters, a jurisdiction that Islamic courts were not meant to... …

  • Karpal a maverick lawyer, but always professional, says retired A-G Abu Talib
    Karpal a maverick lawyer, but always professional, says retired A-G Abu Talib

    Karpal Singh was a maverick lawyer and politician who did what he believed to be right within the system, and not beyond the law, says former Attorney-General Tan Sri Abu Talib Othman in a tribute to the late veteran lawyer. Abu Talib, who had on a number of occasions crossed swords with Karpal in his capacity as senior deputy public... …

  • Malaysia, Australia to ink deal on black box custody, says report
    Malaysia, Australia to ink deal on black box custody, says report

    Malaysia and Australia will sign a deal specifying who handles any wreckage from missing flight MH370 that may be recovered, including the crucial "black box" flight data recorders, according to a report yesterday. Malaysia is drafting the agreement "to safeguard both nations from any legal pitfalls that may surface during that (recovery)... …

  • No Obama meeting for Anwar in next week’s visit
    No Obama meeting for Anwar in next week’s visit

    President Barack Obama does not plan to see opposition leader Anwar Ibrahim when he is in Kuala Lumpur next week, though US officials yesterday did not rule out a lower-level meeting. Obama will become the first sitting US president to visit Malaysia in nearly half a century when he touches down in the country on April 26. Washington has... …

Kuala Lumpur (The Star/ANN) - Syarikat Prasarana Negara Bhd has embarked on a massive restructuring plan that will see Malaysia's biggest urban public transport asset owner and operator attain more financial sustainability, alleviate the heavy burden of its debt and have a better grip on its operations.

Group managing director Shahril Mokhtar said Prasarana had issued a total of about 10 billion ringgit (US$3.28 billion) of bonds and sukuk (Islamic bonds) for the past decade and was paying about 400 million in interest per year.

And the public transportation giant is expected to issue another 6 billion ringgit of sukuk in two equal tranches by February and another in the third quarter of this year to finance its two light rail transit (LRT) system extensions that cost about 7 billion ringgit and other infrastructure works in the pipeline.

It was highlighted in Auditor-General's Report 2011 that Rangkaian Pengangkutan Integrasi Deras Sdn Bhd or RapidKL, a unit of Prasarana that operates the rail and bus operations before the restructuring, had an accumulated total loss of 293.8 million ringgit as at December 2010.

The new Prasarana structure with immediate effect includes the creation of four new entities Rapid Rail Sdn Bhd, Rapid Bus Sdn Bhd, Prasarana Integrated Management and Engineering Services Sdn Bhd (Prime) and Prasarana Integrated Development Sdn Bhd (Pride).

The move is part of Prasarana's five-year plan as underlined in its Go Forward Plan 2.0 (GFP 2.0) blueprint.

These entities will now operate the rail, bus, public transport consultancy services as well as property and commercial development for the group with their own separate accounts.

All the debts from the bonds are reflected at the holding company level.

"Basically, we do not have subsidy and we go to the market to finance our project development.

"But the question is where do we get the money to service the debt? Mostly it is from operations but we are working on this corporate restructuring to stay sustainable," said Shahril after the unveiling of its new corporate structure yesterday.

Explaining the performance of its business units, Shahril said the rail operations that were profitable were cushioning the losses of the bus operations.

"But that is not sustainable and we are finding ways so that one day the bus operations will be sustainable on its own," he said, adding that only 10% of the bus routes were profitable as part of its social commitments to provide public transport services.

Rail was making a yearly revenue of about 240 million ringgit with earnings before interest, taxes, depreciation and amortisation (EBITDA) of 50 million ringgit.

Meanwhile, the business operations have a yearly revenue of about 180 million ringgit but the operational cost was at a staggering 280 million ringgit and that reflected a loss of 100 million ringgit.

Shahril said with a separate profit and loss accounts now, Prasarana could show to the Government how each business unit, especially the bus and rail, was performing.

"Nevertheless, to be fair to the bus operations (Rapid Bus), the rail division (Rapid Rail) has to pay a fee to Rapid Bus for the feeder buses it uses.

"The restructuring exercise would also allow Prasarana to make decisions faster than before, thus giving it a greater freedom to further improve its level of services to the stakeholders," he said.

For the bus and rail services, Shahril said Prasarana also planned to expand apart from the Klang Valley, Penang and Kuantan to Ipoh, Seremban, Kuching and Kota Kinabalu.

Shahril said to further aid the group's financial sustainability, Prasarana was also going big on property and commercial development.

"There is only a few public transport companies in the world that are actually profitable.

"One of them is Hong Kong's MTR Corp where more than 60 per centof its income is from commercial and property development and we are going to do just that," he said.

Shahril said Prasarana was also keen to list its rail business on the stock market post-2018 when the current Sungai Buloh-Kajang mass rapid transit (MRT) system was completed.

"It is because the whole MRT project is fully funded by the Government, thus operationally, it will make money," he said.

For Prime, Shahril said Prasarana would make good use of its vast expertise in infrastructure development to provide consultancy services locally and abroad.

"Ultimately, we want to increase our non-fare business to contribute at least 20 per cent of our revenue by 2017 from 8 per cent now," he said.

Follow @YahooMalaysia on LINE for daily news updates.

Comments on Yahoo pages are subject to our link to Comments Guidelines. You are responsible for any content that you post. Yahoo is not responsible or liable in any way for comments posted by its users. Yahoo does not in any way endorse or support comments made by its users.

  • Karpal’s car crashed into lorry, not the other way around, says Perak police The Malaysian Insider
    Karpal’s car crashed into lorry, not the other way around, says Perak police

    Initial investigations have revealed that Karpal Singh’s Toyota Alphard crashed into a five-ton lorry in the accident yesterday that claimed his life and that of his assistant, Perak police said today. State police chief Datuk Acryl Sani Abdullah Sani also dismissed rumours and speculation that the accident was caused by the lorry crashing... …

  • Told to ‘shut up’ on Twitter, Zul Noordin lashes back at Khairy The Malay Mail Online
    Told to ‘shut up’ on Twitter, Zul Noordin lashes back at Khairy

    KUALA LUMPUR, April 18 — A feud is breaking out between former Perkasa vice president Datuk Zulkifli Noordin and Umno Youth chief Khairy Jamaluddin on Twitter. Told unequivocally by the minister... …

  • Zulkifli shoots back at Khairy in Twitter row The Malaysian Insider
    Zulkifli shoots back at Khairy in Twitter row

    Former Perkasa vice-president Zulkifli Noordin continued his Twitter row with Khairy Jamaluddin today, taking a swipe at him with a belittling tweet and telling him not to be a knee-jerk politician. Khairy, the Youth and Sports Minister, had told Zulkifli yesterday to 'shut up' after the latter had made insensitive tweets about the death of... …