KTMB eyes developing commercial, retail properties worth RM6b in the next 2-3 years

PUTRAJAYA (Nov 14): Keretapi Tanah Melayu Bhd (KTMB) is eyeing on embarking on its maiden property development project within the Klang Valley area, slated to be worth RM6 billion in the next two to three years, as part of its initiatives to ramp up income from its non-fare segment, according to its chief executive officer Mohd Rani Hisham Samsudin. 

"Our landbanks could generate projects worth RM6 billion. We are looking at various pockets of opportunities for the lands neighbouring our stations, to unlock this value and subsequently improve contribution to our revenue from the non-fare segments," he told reporters at the launching ceremony of the 39th Asean Railways CEO's Conference here.

Themed "Rail Unites Asean", the three-day annual conference is organised in collaboration with national railway operators from seven countries: KTMB from Malaysia, followed by State Railway of Thailand, PT Keretapi Indonesia, Ministry of Public Works and Transport in Cambodia, Myanmar Railway, Lao Railway Authority, and Vietnam Railway. 

Mohd Rani Hisham said KTMB's foray into the property development, which will be on the concept of transit-oriented development and partnering with strategic developers, will not be immediate, as it is still subject to obtaining the relevant development orders from the local authorities and pending finalisation.

"However, if all goes well and subject to relevant approvals, we could kick off the property projects by as early as next year," said KTMB's independent non-executive director Datuk Ahmad Zainuddin Jamaluddin, who was present together with Mohd Rani Hisham.

At the same time, Mohd Rani said KTMB has to be mindful in the type of development, as each location has a distinct market to capture.  

"We can't simply develop any projects as we like, as we need to be mindful of the markets that each location can capture. Some stations are located on routes that passes through residential and township areas, while some stations are closer to the industrial zones. Different stations do serve different markets and that is where we have to be careful in the grand design of the development," Mohd Rani added.  

As for the overall strategy to boost non-fare revenue, Mohd Rani said KTMB is studying various ways to improve earnings to be chalked from the advertising segment. 

"This is another way that we can boost non-fare revenue and I believe, we can capitalise on this method to ramp up earnings from non-core segments, "he added. 

Currently, Mohd Rani said KTMB's fare revenue are generated by its two business segments: passenger and cargo.

"Within the Klang Valley, KTMB's routes are competing with other operators such as Prasarana Malaysia Bhd, Mass Rapid Transit Corp Sdn Bhd and Express Rail Link Sdn Bhd. It is not easy to capture ridership within the Klang Valley areas," he said. 

"But for inter-state and long distance, it is undeniable that we are the market leader in this segment. And there is a lot of work that needs to be done to further improve our ridership and cargo services," Mohd Rani added, noting growth in ridership tracks the country's economic growth, which hovers in the range of 4.5% to 6% annually.

By December, Mohd Rani said KTMB will be undertaking a double tracking project to expand its railway network from Gemas in Negeri Sembilan to Johor Bahru in Johor, the construction of which will span over the next four years. 

"Once this is completed, then all of KTMB's railway network stretching from north to south, will boast double track," he added. 

In the third quarter of next year, Mohd Rani said KTMB is due to receive the first of 22 rolling stocks in the form of electric multiple-units (EMUs) that it has ordered from CRRC Zhuzhou Locomotive Co, and manufactured at the latter's plant in Batu Gajah, Perak. 

In April, KTMB had signed a €180 million contract with CRRC to buy 22 EMUs, of which 13 are four-car diesel multiple units and the remaining nine are six-car EMUs. — theedgemarkets.com

For more stories, download EdgeProp.my pullout here for free.