Transport minister Loke Siew Fook said Railway Assets Corporation (RAC) and KTMB had selected SMH Rail Sdn Bhd through an open tender process to carry out a major maintenance overhaul of the unusable locomotives and wagons.
“This is an innovative approach and a win-win situation for everyone. The government does not need to set aside a large amount of funds to revive these locomotives and wagons.
“The risk is borne by the private sector because they have to pay us first and fund the overhaul of the locomotives and wagons to ensure that they are operational before leasing them back to us,” Loke said at the launch of the “pay-as-use” leased locomotives and wagons in Sentul today.
The signing of the pay-as-use contract between RAC and SMH Rail was completed on March 16, 2024, while the 25-year contract agreement between KTMB and SMH Rail was concluded in the third quarter of 2024.
Under this agreement, Loke said a total of 44 locomotives owned by RAC would be refurbished and upgraded before being leased back to KTMB.
Six new locomotives will be leased directly by SMH Rail to KTMB, while 450 new wagons – 246 owned by RAC and 204 owned by KTMB – will be available for lease for cargo transportation.
Loke said KTMB had received numerous requests from private companies seeking to collaborate with the GLC to provide logistics services.
However, the company was unable to accommodate these requests due to a shortage of operational locomotives and wagons, he said.
“We couldn’t take up their business, even when they offered. With these new and additional locomotives and wagons, we are now able to accommodate their requests,” he said.
Loke said the initiative not only aligned with the national agenda to optimise rail infrastructure and enhance local industry participation, but also supported the government’s target of achieving net-zero carbon emissions by 2050.
“A single cargo train with 40 wagons can replace approximately 80 trucks on the road.
“A lot of industries want to make use of the railway because it prevents their goods from being stuck in traffic and aligns with their environmental, social and governance goals,” he said.