M'sian national railway plans turnaround

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Petaling Jaya (The Star/ANN) - Malaysia's national railway company - KTM Bhd (KTMB) - plans to return to the black three years from now under its new three-year turnaround which includes increasing income stream from its existing operations as well as from new businesses.

This turnaround plan is drafted under new president Elias Kadir, who was recently appointed to helm the loss-making entity on May 2. Elias was formerly the head of KTMB cargo division.

Elias, known to be popular throughout the company due to his hands-on approach in operations, has for the first time in its history, included representatives from the Railway Union of Malaya (RUM) in the discussion of the turnaround plan.

RUM president Abdul Razak Md Hassan told StarBiz that what he understood from Elias' turnaround plan was a reduction in losses in the first two years and return to profitability in the third year.

"In general, KTMB wants to increase income stream from three of its businesses namely the cargo, commuter and intercity services.

"These businesses will be improved through enhanced efficiency, on-time delivery of trains and addition of new trains.

"For example, our KTM Komuter on-time delivery has improved to 86 per cent from 17 per cent since Elias took over.

"The plan also includes new businesses such as more retail space to be leased at our stations," he said.

Abdul Razak said although the turnaround plan included cost-cutting measures, it would maintain the benefits of the workers.

"We are happy as the relationship between the union and management has strengthened whereby this will translate into increase productivity from workers.

"The working environment is also now more systematic and has propelled employees to work harder," he said.

RUM currently has about 3,600 members.

Over the years, many turnaround plans have proven futile as apparent in KTMB's latest available financial statement as at December 2009.

It was reported that the company managed to rake in net profits of between 9 million ringgit (US$2.9 million) and 15 million ringgit from 1993 to 1995. But after that, it began to post losses of 116 million ringgit in 2007, 84.6 million ringgit in 2008 and 92.6 million ringgit in 2009.

The losses were attributable to high operational cost while maintaining a relatively low fare, and a steep decline in its biggest revenue contributor of freight business.

One of the reasons for its declining freight business was the insufficient train capacity of the State Railway of Thailand to support KTMB's cross-border services.

KTMB also did not have enough electric multiple sets to support its commuter train services.

(1 ringgit = $0.3221)

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