From Wan Agyl Wan Hassan
We’ve spent years telling ourselves that Keretapi Tanah Melayu Bhd (KTMB) is a victim of bad structure; that it’s trapped in an outdated system where it runs the trains but doesn’t own the tracks, stations or land it operates on. That the real problem lies with the Railway Assets Corporation (RAC), the so-called “sleeping landlord” holding back non-fare revenue and preventing KTMB from becoming financially sustainable.
But structure can’t be the excuse forever, especially not when those empowered to fix it are now dragging their feet. KTMB’s exclusive right to operate Malaysia’s rail network expired on June 30, 2020. Since then, it has remained in place not because of performance, but inertia.
Meanwhile, RAC is beginning to step up despite its sluggishness. It is reclaiming oversight, managing rolling stock rehabilitation and quietly asserting itself as the infrastructure owner it was meant to be. However, the pace is far too slow for the kind of transformation Malaysia’s rail sector urgently needs.
In this post-monopoly landscape, KTMB is no longer a victim, but has become a protected incumbent.
The consequences are plain to see. Today, approximately 68% of KTMB’s costs go to overhead. This means almost seven out of every 10 ringgit is spent on administration, indirect staff and legacy systems; not on actual train operations, rolling stock renewal or service improvements.
By comparison, top-tier operators in the rail sector run with less than half of that overhead.
In short, we’re not running a railway. We’re managing a bureaucracy that happens to run trains.
Even worse, KTMB still controls the operations control centre (OCC), the brain of Malaysia’s rail network. Whoever manages the OCC decides which trains run, when and on which tracks. It’s like letting one airline run air traffic control for all competitors.
Even if we legislate open access or encourage multi-operator competition, KTMB will still have operational priority and full situational control. That’s not reform. That’s a bottleneck.
This isn’t just a technical flaw. It’s a structural roadblock. It means commuters experience unnecessary delays. It means new operators can’t fairly access the network. And it means public money channelled into infrastructure, new rolling stock and maintenance is not matched with the institutional accountability needed to make that investment count.
As the legal owner of rail infrastructure and assets worth over RM35 billion, RAC must now act decisively. It must take full control of the OCC and become the neutral infrastructure manager that allocates train paths transparently across operators.
This model known as “vertical separation” is not new. It’s been successfully applied in the UK, the Netherlands and parts of Australia, where a single rail network is shared by multiple operators under tight access agreements. It ensures transparency, fairness, and better utilisation of public infrastructure.
We must also acknowledge that RAC may not be technically ready to run the OCC on its own immediately. But that doesn’t mean we wait. Malaysia can begin by creating a joint governance model where RAC sets the rules and frameworks for access, while KTMB continues the technical operations under regulatory oversight.
Countries that have done this successfully started small with open timetabling rules, independent dispute resolution panels and pilot access contracts to test the model.
None of this will work if KTMB continues to operate without reform. It must decide: is it a public utility or a commercial operator? If it’s the former, let’s sign transparent public service obligation contracts tied to key performance indicators. If it’s the latter, empower it to generate non-fare revenue, access station retail and compete for routes.
But right now, KTMB benefits from both worlds; subsidies without accountability, assets without responsibility, and operations without competition.
Blaming low fares is convenient. But Malaysians aren’t complaining about cheap tickets. They’re frustrated with unreliable service, long delays and a system that doesn’t deliver. Until we fix the institutions that govern KTMB, not just the funding, we will continue paying more for less.
This isn’t about privatising rail. It’s about derisking public investment and creating a system that rewards results. If KTMB wants to stay in the game, it should earn its place through service quality, not legacy advantage.
RAC, for its part, must stop being passive and start behaving like the national rail steward it was created to be.
We are at a crossroads. Keep protecting KTMB, and the system will keep underperforming. Empower RAC, open the network and hold all operators to a higher standard, and Malaysia can finally have the efficient, modern rail system it deserves.
Wan Agyl Wan Hassan is the founder and CEO of MY Mobility Vision, a transport think tank.
The views expressed are those of the writer and do not necessarily reflect those of FMT.