KERETAPI Tanah Melayu Bhd (KTMB) aims to develop land along its rail network into bonded warehouses to grow its non-railway revenues, said its president Datuk Elias Kadir.
A bonded warehouse is a building in which dutiable goods may either be stored or undergo manufacturing operations.
Upon entry of goods into the warehouse, the importer and warehouse proprietor incur liability under a bond. This liability is then cancelled when the goods are withdrawn for supplies.
“I personally think there is great business in this. We will approach overseas investors to manufacture their goods at the bonded warehouses and subsequently move them by train,” Elias told Business Times.
Elias is also talking to hypermarkets to set up shop at the train stations throughout Peninsular Malaysia.
The national railway company has 196 train stations nationwide and 53 are located in the Klang Valley.
“We want to create a lifestyle where people can travel and shop. I am also looking at selling advertising space inside the trains and the stations,” he said.
KTMB is currently involved in moving goods and people. It runs cargo, commuter and inter-city services and this business contributes 100 per cent to its yearly revenues.
The company, however, has been loss-making 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.
“KTMB is a bankrupt company with liabilities of RM2.5 billion, and assets worth around RM500 million. But that can change.
It can be profitable but not under the present structure and system. With the present structure and system we can only do repair works,” Elias said.
Instead of a rail fare hike, which is determined by the Land Public Transport CommissionSPAD, KTMB will have to find new ways to make money.
“We have brought in Lloyd to assess our tracks as we move from single track to double tracks, and increase capacity by fivefold. I am obsessed with seeing a KTMB turnaround. I think it can be done as we have good people,” Elias said.