KUALA LUMPUR: Seamless rail networks from Malaysia to Indochina, China and even Europe – for freight and passenger travel – are among the key priorities for Keretapi Tanah Melayu Berhad’s (KTM) newly appointed acting chief executive officer Ahmad Nizam Mohamed Amin.
And his more immediate plans include reviving the once-popular scenic rail route from Butterworth in Penang to Bangkok in Thailand that was suspended close to a decade ago.
In his first media interview since taking the helm at Malaysia’s national rail operator earlier in August, Ahmad Nizam, 54, emphasised the need for KTM to integrate the country’s rail networks with those of neighbouring countries as a means to increase revenue streams for the government-linked firm.
This comes amid calls from Malaysia’s transport ministry for KTM – which falls under its purview – to turn profitable, be financially sustainable and “reduce its funding gap” from the government.
Ahmad Nizam is eyeing to revive the ASEAN (Association of Southeast Asian Nations) Express, a freight rail service launched in 2024 which connects Malaysia with Thailand, Laos and China – aiming at opening new markets in the region and lowering business costs.
He told CNA that the service has stalled because of customs obstacles in some of these countries which makes the option less viable.
“This is one of my priorities (as acting CEO) because this is one of the businesses that’s not yet been tapped to the maximum within the country and there’s some encouragement for us to go further than that and get more revenue and make some money out of it,” he said.
SOME COUNTRIES IMPOSING CUSTOMS OBSTACLES FOR ASEAN EXPRESS: CEO
ASEAN Express was launched in June 2024, with the first shipment departing from Selangor for Chongqing in southwestern China. The transit time was under 14 days, faster than the typical sea freight route which could take up to three weeks.
Products slated to be transported through this service include durians, electronic appliances and other agricultural products. Industry experts had predicted that the ASEAN Express could lower logistics costs by 30 per cent.
Ahmad Nizam outlined that even as the service is an attractive proposition, especially for freight forwarding firms, tight regulations at some border checkpoints have diminished interest in the project.
“Some countries don’t have scanning equipment for cargo so this slows down the process as all the goods have to be brought down the train onto the platform to be checked. Moreover, some countries don’t allow agricultural products to pass through (their territory) and require excessively strict documentation,” he said.
“If we can overcome these obstacles, we can resume the services and resume freight between Kuala Lumpur to Chongqing, China and beyond. Further from that, we can even aim to transport directly to Europe.”
When asked by CNA which countries had these customs obstacles, he declined to reveal, citing corporate sensitivities. However, he urged the Malaysian government to negotiate with its counterparts in these countries.
“If these strict regulations are being imposed on KTM, we are unable to transport the goods in a short amount of time because there are various (obstacles) that we must pass through,” said Ahmad Nizam.
“We hope that MOT will be able to help KTM – to discuss and negotiate from government to government, to ease our efforts to transport cargo.”
On the passenger service side, Ahmad Nizam said that the electric train service (ETS) will connect passengers to Padang Besar in Perlis where they can transit and connect to Thailand’s railway services to head to destinations like Hat Yai or Bangkok.
On the southern end, the ETS is expected to be extended to JB Sentral in Johor Bahru by the end of the year, benefitting commuters there and even beyond.
Ahmad Nizam said that the ETS will “revolutionise” transport options as it connects key cities like Johor Bahru, Kuala Lumpur, Ipoh, Butterworth, as well as Alor Setar with a much faster service than diesel train options.
For instance, once the service is completed, commuters in Johor Bahru can get to the capital Kuala Lumpur in 3.5 hours by train – a commute that’s comparable to a road journey via car or tour coach.
More pointedly, Ahmad Nizam highlighted that there are plans in place to resume a direct service between Butterworth in Penang to Bangkok. The service was previously suspended in December 2016.
“This year we are looking to resume operations by working with our counterpart rail operators in Thailand (State Railway of Thailand) to revive the Bangkok to Butterworth service, and this still needs agreements from both parties,” he said.
Ahmad Nizam added that the service will include advancing double-tracking projects, which will boost the speed of travel, and implementing integrated ticket systems.
Rail expert Nor Aziati Abdul Hamid told CNA that KTM’s plans to integrate Malaysia’s freight rail network with neighbours in the north is a “shrewd move” as it can facilitate the smooth movement of logistics with economic powerhouse China, adding that the integration also serves as a trade gateway to central Asia and Europe.
She said that these are plans in place under the Pan-Asia Railway Network, an agreement signed in 2006 which aims to connect Kunming in China’s Yunnan province all the way to Singapore, passing through Myanmar, Thailand, Vietnam, Cambodia, Laos and Malaysia.
Nor Aziati, who is a senior researcher at the Universiti Tun Hussein Onn’s Centre of Excellence for Rail Industry (ICoE-Rail), stressed that making this a reality is especially important in the current trade climate with the US under President Donald Trump imposing protectionist measures.
“Malaysia and other ASEAN countries must find other avenues for trade and if we have a stronger rail integration with China and other Asian countries, this could be an important avenue,” she said.
Nor Aziati added that enhancing cargo transport links is an area that would also boost KTM’s revenue and profitability in the short term.
In July, Transport Minister Anthony Loke said that KTM has yet to achieve profitability and that there was a shortfall in operational spending.
“In terms of operations, we have not yet reached profitability or the break-even point,” he was quoted as saying by local media.
“But the point is, we must ensure KTM’s operations improve, especially commuter services, ETS and on the cargo side, where we do make a profit,” Loke reportedly said.
Malaysia’s New Straits Times in a report last year said that the state-owned railway company has been struggling financially, with over RM2 billion in liabilities, forcing it to depend heavily on government funding to sustain its operations.
Local media had also previously reported that an Auditor General’s report found that the firm had accumulated losses that reached RM2.83 billion as of 2018.
In the recent interview with CNA, KTM’s acting chief Ahmad Nizam acknowledged that the operator needs to balance its books better and he is looking to present his plans to achieve this to the board in September.
“Making profits and being more independent has been the ultimate aim all this while and since it’s not been achieved yet, so that is something I’m keen to look into,” he said.