KUALA LUMPUR: The government has rejected a joint effort by Malaysian Mining Corp Bhd (MMC) and Gamuda Bhd to take over Keretapi Tanah Melayu Bhd's (KTMB) operations.
Business Times reported last month that a privatisation is in the works with Gamuda and MMC, a company controlled by Albukhary Foundation, in discussions to formalise an agreement for the take-over.
The plan includes an investment of over RM5 billion.
Gamuda and MMC are already involved in a joint venture to carry out the double-tracking railway project from Ipoh to Padang Besar on a design-and-build basis, which is now nearing completion.
It is understood that besides privatising KTMB operations, both parties want to take control of the landbank parked under Railway Assets Corp (RAC) and build housing and commercial properties.
KTMB has assets and land worth an estimated RM50 billion.
It is the operator of the national railway line, while the assets and land are owned by RAC.
Although the assets are parked under RAC, KTMB has a big influence on how the assets are utilised.
MMC has been planning to take over the ailing KTMB since 2011.
According to a source close to MMC, the company now plans to take over the freight business of KTMB after its proposal with Gamuda was rejected.
The freight business is KTMB's most profitable asset but operational inefficiency has been pulling down the company's overall earnings.
The planned takeover would give MMC substantial control over the nation's railway and logistics operations.
MMC owns the Senai Airport and major local ports, including the Port of Tanjung Pelepas and Pasir Gudang Port.
KTMB, which is involved in freight, intercity and commuter train services, among others, has been bleeding red since its corporatisation in August 1992.
It did make a net profit of RM9 million to RM15 million from 1993 to 1995, but later sank into the red again.
For fiscal year 2012, KTMB recorded a net loss of RM284 million on revenue of RM361 million.
