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Staying on track
By Sharen KaurPublished: 2013/10/14

FARES REVISION OPTION: KTMB needs RM550m revenue to break even, says president


KERETAPI Tanah Melayu Bhd (KTMB) needs to ring up a revenue of RM550 million a year to break even, says its president Datuk Elias Kadir.

But the national railway company is far from being profitable, as its current revenue is in the region of RM330 million to RM360 million a year, Elias told Business Times recently.

KTMB, which employs 5,500 people, runs cargo, commuter and inter-city services.

Its bread and butter is cargo. But the business has dwindled because of the lack of operating locomotives, Elias said.

KTMB targeted a revenue of RM266 million from cargo last year but achieved RM140 million.

Elias said 58 locomotives were required to achieve the target but only 44 were in operation.

The rest could not be used as they had not been maintained, while for some, the works were halted due to issues with contractors. Due to this, the load factor fell by as much as 30 per cent.

Elias said a revenue of RM550 million is achievable if current fares for cargo, commuter and intercity services are revised accordingly.

The last time the fares were raised was in 1982 for cargo and 1992 for commuter services.

“The revised rates will help double revenue.

Our rates for cargo are the cheapest compared with other modes of transportation,” Elias said.

KTMB has been recording losses since its corporatisation in 1992. It did, however, post net profits of between RM9 million and RM15 million from 1993 to 1995.

For fiscal year 2012, KTMB recorded a net loss of RM284 million on revenue of RM361 million.

Operating loss was RM275.6 million, attributed to the company’s high yearly expenses of around RM600 million, Elias said.

He added that KTMB spent an average RM250 million a year on wages, RM200 million on fleet and infrastructure maintenance and the rest was direct operating cost.

“We are working on reducing our yearly expenses to RM500 million. The potential for cuts is there. We will not slash our workforce,” Elias said.

They separate woman coach n mens coach was a big mistake..there are many vacant seat for woman coach

This post has been edited by Yukieliow: Oct 14 2013, 09:25 AM

250mil / 5500 = 3700/month per person

Even worse when single wimminz purposely sits at mixed coach even during peak hours

main prob is

but solution is raise fair ... lol! fuking genius strategy ....

Ticket machine project has failed.

nowadays all malaysian company claimed theirs is the cheapest in the region, in the south east asia, in the asia, in the asia pacific, in the world huh?!? 58 of your train loco suppose to work for you.. why it didnt?! its your internal problem. dont drag your internal issues to the end users as we just dont care... fix the issue and start working..

some enjoy the taboos ..

they giving free couch entrance to vmen and now saying they are in losses?

ask them changes their strategy not to empahsis on price increase

They want more people and companies to use their services and they plan to do this by increasing the fares?

they failed never mind...they can tax back the money from citizen

Govt should expedite double tracking so as to improve competitiveness on railway against other transport mode.

KTM Intercity ridership dropping, while ETS ridership is increasing. Yet.....less than half of the network is electrified and double tracking, but motorways are almost anywhere in the peninsula.

increase fare to 1 fold la

when your price is set artificially low by the govt for social purposes, there wont be enough money to expand (or maintain) your business even if you are a monopoly.

even if you're the only char kuey teow seller in malaysia, if the govt sets your price at 1rm per pack when the cost of your ingredients alone is above that, you're maknig losses every day.

the only way is to get huge capex investments in order to increase your scale and get a lower per pack average cost. what ktm should do is to either float on the stock market, or do a large bond sale backed by its assets (or whatever it hasnt turned into collateral yet).

Listing in stock market is no no for KTM. That is because it will open itself into takeovers, for which parties now perceive that some companies wanted to takeover KTM just for its land rather than for its transport service.

you can just open up a minority position (or even sell non-voting shares - although probably not much demand in that).

in any case, there's a lot of assets and value (as you mentioned, land being one of them) that ktm can unlock to get the funds for capital.

Every station have lubang so people ride free. Half the train full of indon and bangla because too cheap.

Time to double the price.

incoming naik harga!!!

The rest could not be used as they had not been maintained, while for some, the works were halted due to issues with contractors.

issues with contractors should not be bragged out to the news yoo..

exactly.
it's reasonable on the old 3 coaches.
but 6 coaches? c'mon.....