Universiti Utara Malaysia

Master of Business Administration Supply Chain Management (BJMP6023) Prof. Dr. Premkumar Individual Assignment Wilson Christopher Metric No: 809402 Date of submission: March-29th-2012

Rail System in Malaysia

1.0 Executive summary This write up specifically discuss about one component of the Malaysian transportation system, which is the railway KTMB (Keretapi Tanah Melayu). This entity is about 120 years old in transporting people and goods. Being a son of an ex-KTM train driver and had been traveling with my family to various locations I have witnessed the progress of KTMB for all these years. This paper explains if KTMB is still relevant and the core of Malaysian transportation system. As consumers become more sophisticated, they demand the right services at the right time, right price and at the right place. Today, the major challenge that KTMB faces are loss in revenue. This can be overcome if KTMB is willing to enhance the traveling time from one point to another point. They should also consider increasing the number of trips on various important destinations. For example, traveling by express train from KL to Butterworth1 will take from 6 to12 hrs whereas express bus takes about 5 hrs. The frequencies of the departure for the bus are also on hourly basis whereby as for the train it is only one trip a day. If only KTMB could turn around their priorities they could be the 1st choice of transporting from cities to cities. Page number 10, explains how KTMBs actions gain the confidence from the public by reducing the waiting time and by increasing the speed of the trains. KTMB plans, design, make and deliver the needs of todays generations. While doing so, KTMB may find ways of meeting the needs of all the stakeholders equally. In page number 8 & 9 we could see if KTMB will be able to sustain in near future and the action taken. Problems arise when railway land are being sold to housing developers where the residents need to vacate to newer place. With the high power modern trains, more electricity energy is required to drive those engines. Will that erode our future environment for the sake of making more profits? Finally we could see the actions taken by KTMB by addressing to all these issues by increasing double lanes. This is a big investment for the Government; with all this improvements, will KTMB be still the transport of choice to meet the demand of the near future.

Train time table can be refer at http://www.ktmb.com.my/images/pdf/jadual%20page%201.pdf

2.0TABLE OF CONTENT 1.0 2.0 3.0 4.0 5.0 6.0 6.1 7.0 8.0 8.1 8.2 9.0 9.1 9.2 10 10.1 10.2 11 11.1 12 13 14.0 14.1 14.2 Executive summary Table of Contents Introduction KTMB History General Information on the Railroad System in Malaysia. Mission of KTMB.. Vision of KTMB Strategic roles of KTMB KTMB Operations. Intercity Freight. KTMB Intercity Passenger Rail and Intercity Commuter Rail.. Stakeholder Stakeholder Chart.. Stakeholder Matrix........ KTMB Sustainable. KTMB to be privatize. Sustainability Program of KTMB.. Sustainability Phase Model Sustainability Challenges.......... Recommendations. Conclusion. Appendices & References.. KTMB losses................ Provides a map of the KTMB railway network 3.0 Introduction The Malaysian railways are indeed a dynamic, diverse corporatized entity that has the potential to play an important role in the development of a sustainable transportation system in the country. The company is wholly owned by the Minister of Finance Incorporated, a corporate body established in Malaysia. The seamless land and bridge connections with neighboring states 2 3 4 4 4 5 5 5 5 5 6 6 7 7 8 9 10 10 11 11 12 13 14 15

are a key characteristic that may define the rail aspect of the system. Malaysian railways are facing the challenge to improve their reliability and speed in order to offer competitive services and enhance their importance as a road alternative. 4.0 KTMB History The first railway track in Malaysia was built in 1885. This was a 12.8KM length of road from the tin mining town of Taiping to Port Weld (known today as Kuala Sepetang). 1885 also saw the introduction of steam locomotive service. The early 20th century involved the completion of several connections including Padang Besar (in Perlis) to Singapore (in 1913), Gemas to Tumpat to Hatyai (Thailand) (in 1930) and the North South link from Singapore to Thailand border (in 1931). 5.0 General Information on the Railroad System in Malaysia As of December 2010 Malaysia has 1849km total track of which 57KM use Standard (1.435 M) gauge and 1792km Narrow (1.000M) gauge. Approximately 150 KM of rail in Malaysia is electrified2. Keretapi Tanah Melayu Berhad is the largest railroad in the country. (Keretapi is a Malay word that translates to fire wagon). KTMB owns 2262 km out of the total 2418 km of tracks in Malaysia and employs 5024 employees. Of the remaining 156 KM, the Sabah State Railway has 134 KM. (The remaining mileage remains unaccounted). KTMB3 is the major and most important railroad in Malaysia. It is government-owned but managed by a private entity. (Fixture 1)

6.0 Mission of KTMB

KTMBs mission statement is as follows: KTMB is to be competitive and responsive to market needs.

All the information from the introduction paragraph were compiled from the CIA World Factbook found at http://www.cia.gov/cia/publications/factbook 3 The information for the KTMB has been found on http://www.ktmb.com.my

 KTMB must achieve its goals through a highly trained and motivated workforce using modern technology and process innovation. KTMB must provide reasonable profit and long-term growth to its shareholders. 6.1 Vision of KTMB To be the most preferred mode of land transport in the country.

7.0 Strategic roles of KTMB KTMB has always been the nations established player in the logistic industry, moving passengers, goods and services throughout the railway network in Peninsular Malaysia and Singapore. Its rail network strategically links and helps to develop the industrial growth centres in the hinterland to the seaports such as Penang Port, Port Klang, Port of Tanjung Pelepas and Tanjung Pagar. It also connects cross-border movements of freight between Singapore, Malaysia and Thailand.

8. KTMB Operations 8.1 Intercity Freight KTMB can transport a wide variety of products including hazardous material. There are currently 5 different types of freight cars available; each side of the car; Bogie Flat Low Sides (BFL), which are open wagons that transports bulk materials such as iron, granite, etc; these cars have drop-down doors on the side; Bogie Container Flat (BCF), which are flatbeds that can facilitate intermodal transfer from ocean ships onto the trains; Bogie Log Wagons (BLW)4, which are flatbeds used for carrying logs; and finally, Domestic Containers, which is a KTMB owned container. 8.2 KTMB Intercity Passenger Rail and Intercity Commuter Rail.

The types of KTMB equipment or types of coach- http://www.ktmkargo.com/#/equipment/

KTMB operates four Daytime express trains (Ekspres Sinaran, Ekspres Rakyat, Ekspres Kenali and Ekspres Tebrau) and Four Nighttime (or evening) express trains (Senandung Malam, Senandung Langkawi, Ekspres Wau and Ekspres Timuran) 9.0 Stakeholder Stakeholders are the individuals, groups or organizations who are actively involved or engaged into an organization. Whose interest and action may be positively or negatively affected the result or performance of the company. On November 2011 a meeting was organized with the Five (5) focus groups were successfully conducted with strong participation from stakeholders in railway industry. It is to provide a forum to gather information on local railway industry, to identify capability gaps, lessons learned and best practices in developing the Malaysian railway industry. Five (5) focus groups each were conducted in MIGHT Building at Cyberjaya. Each focus group used the same set of process, which concentrated around four (4) major topics5:

1. Identification of major components in each sub-sectors of railway industry. 2. Review on current capability. 3. Selection of focus areas. 4. Identification of related issues and challenges related to industry and technological capability, human capital and market potential.

9.1 Stakeholder Chart

Read more from myForesight at http://www.myfutures.my/index.php/section-blog/28-slide-article/116stakeholder-sees-grim-future-in-the-development-of-local-rail-industry-with-absence-of-focused-areas

Stakeholder

What they contribute to the company

What they expect from the company Constant supply, quality goods,

What the company expects from them Loyalty, continues support Hard work, loyalty

Strategic Implications

Customer

Business,

good customer service/environment

Keep happy

Employee

Knowledge, skills, effort, innovation

Fair compensation, health and welfare, safety, and job training

Monitor performances

Government Shareholders

Capital Capital Reach to customer,

Good performances Profit, ROI Consistent supply and new products

Ethical practices, Support Support Ethical behavior, Serve customer well

Monitor performance Keep happy Audit, change retailer if needed

Supplier

maintain quality service and products

9.2 Stakeholder Matrix

Stakeholder Customer Employee Government Shareholder Suppliers Power Low Low High High Low Commitment Low High High Low High Interest High High High High High Impact High High Low High High

Power: Ability to influence company decision. Commitment: Obligation to the company. Interest: Level of concern towards the company decision/performance. Impact: Effect of their actions towards the company

10 KTMB Sustainable Here is another sad story from residents of Kampung Railway in Sentul, Kuala Lumpur. Their livelihood has been disrupted over a development project. This area was known to be a Railway quarters for the railway man to stay with their families. There use to have football field, railway sports club, small medical dispensary and other facilities. All these are gone for the sake of the development of housing projects. Such of this typical strategy were applied here at Perai, S.Perai, P.Pinang.

"Imagine the hardship our fathers had gone through when they first came from India to build railway tracks here.6 "They built Kampung Railway but now we are forced to move out without consideration of how the village played a vital role in the nation's railway track development," he said, adding that the last eviction notice was served in October last year.
6 h

Read more: 'Change KTMB land status' - Central - New Straits Times http://www.nst.com.my/streets/central/change-ktmb-land-status-1.53731#ixzz1odCZ9b8c

10.1 KTMB to be privatize What will happen if 120 years old railway need to been privatized? As the railways started to lose the revenue they have to consider selling their land, this is needed in order to liquidize the cash flow. Through this privatize, some 1 billion ringgit will be injected to KTMB. This exercise will increase the cash flow of KTMB for their double track projects however; they had to leave somewhere 5,500 workers to be jobless. KTMB need to look into the live hood of their workers and family rather that just focus one aspect of pumping cash.

If KTMB was privatized, it would mean higher ticket fares7; a burden for lower-income groups dependent on these trains. But KTMB cannot do business. Fares cannot be raised because they are controlled by the government. If this is given to a private company, the cheap fares we are seeing today will be raised to get better returns, he said.

10.2 Sustainability Program of KTMB

More than5,500 workers will be retrenched http://www.freemalaysiatoday.com/2011/12/22/union-tells-mmc-torail-off/

8.0.1 Electrified double track project (EDTP) can also form the backbone for future commuter services in the northern area similar to Klang Valley commuter services that will allow for development to be more dispersed as people working in cities can live outside. Better rail services will benefit lower income groups and rural communities. 8.0.2 The long suffering of KTMB Komuter users can look forward to better commuting experience as 38 cars been added with Electric Multipal Unit (EMU) is put into services. With this EMUS KTMB will be able to reduce the waiting time from the current 15 minutes to 10 or 7 during the peak periods.

11 Sustainability Phase Model

1. Rejection
- Signifies

the lowest

2. Non

degree of responsiveness Responsiveness towards human or ecological resources.

3. Compliance - Emphasis is on compliance with legal standards.

-Financial & technological

factors dominate business strategies.

4. Efficiency
-Systematic

attempt to

5. Strategic Proactively

6.Sustaining
- Corporation

integrate human resource functions to reduce cost / increase efficiency.

-Intellectual & social capitalseeks to promote change with

is used as part of corporate other industries/society strategy. participants.

Organizations

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-KTMB falls under the Compliance phase because it meets the minimum requirement. KTMB also able to reduce the usage of fuel comparing to the public transport by road thus, this leads to less pollution and better environment. -KTMB faces competition from road transportation companies however; KTMB can be considered being 6 times more efficient in cargo transporting compared by road. Example: - Railway trains consume 80% less fuel than a truck whereas for the passenger train it reduces by 20 times and more efficient. -With the Electrified double track project (EDTP), KTMB would tap energy from the national grid, which currently has a reserve margin of 38% over 70% of the grid. This is currently powered by natural gas thus, these gasses are much cleaner than diesel or petrol used in car and trucks. - KTMB helps reduce road fatality rate; Malaysia has one of the world highest fatality rates8. Trains are much safer and can save the country an estimated of RM400million annually in road accidents. -KTMB faces a big challenge with regards to the land issue of Kampung Sentul. The KTMB finds way with the developer YTL Land & Development Bhd to provide every resident a flat with 3 rooms and one bathroom for a price of RM45, 000 in Kuala Lumpur with other facilities.

12 Recommendations With the doubled track extension from Ipoh to Thai border, KTMB services in terms of speed will lead KTMB to increase the numbers of trips from major towns. This increment will increase the revenue of KTMB. For an example, KL-Butterworth (390 km) by having double track the speed of the train could be increase and as a result each trip will take only about 3 hours leading to a total saving of 6 hours. 9 KTMB could also consider using solar power or reuse energy for
8 9

See the details of road fatality http://thestar.com.my/news/story.asp?sec=nation&file=/2010/9/18/nation/7061384 Explains the details on the time saving with the double track http://www.2t.com.my/EN/project/how.html

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other railways gadget. KTMB should have road shows on their new services so that the public will know the progress of KTMB and the new offers provide service operators. KTMB must approach Government during (Balik Kampung) and encourage the travelers to travel by train, this is vital as to compare by road and bus, the number of accident are at the rising state. According to statistics provided by the Royal Malaysian Police (PDRM) 414,421 accidents were recorded in 2010, an increase of 4 per cent over 397,330 accidents in 2009.10 With KTMB increases the numbers of trips, the public will gain confident as a result railway will be transport choice from road to train.

13 Conclusions KTMB will continue its effort to turn railway as a preferred mode of public transportation, as they are the only rail operator that has a nationwide network. The possibilities of expanding to the rest of other regions in this country by providing commuter service like in Penang and Ipoh is highly possible. With the electrified double track and with purchasing more electric locomotives KTMB will be able to provide a faster service. At the same time the new trains are also environmentally friendly system that will cut down on CO2 emissions. We could conclude that KTMB considering being compliance and sustainable since they are working towards minimizing global warming and climate change. Apart from that, they are also upgrading their line from a middle gauge to a standard gauge, as it is used in Europe and Japan. This could enable the train to run faster at a top speed of 200 km/hour. Currently, it takes six and a half hours to travel from Kuala Lumpur to Singapore. With the high speed train, this journey could be reduced to one and a half hours, and possibilities of replacing the airline route is in hand. In relation to the rest of the country, KTMB could be able to reach cities in west Malaysia each within an hour. With this KTMB will once again be the core of Malaysia transport provider.

10

Read more on the road accident http://www.theborneopost.com/2011/08/25/don%E2%80%99t-just-add-up-toaccident-statistics/

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14 Appendices & References

http://www.thesundaily.my/news/192621

14.1 KTMB losses 13

http://www.themalaysianinsider.com/litee/malaysia/article/ktmb-recorded-rm1.45b-in-losses-upto-2008-says-audit-report/

14.2 The following figure provides a map of the KTMB railway network 14

(Figure 1)

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