Govt seeking control of local Chinese rolling stock arm in RM10.7b train deal
KUALA LUMPUR: The government plans to secure majority ownership in the Malaysian subsidiary of a Chinese rolling stock giant as part of a RM10.7 billion proposal to lease 62 passenger train sets for Keretapi Tanah Melayu Bhd.
The Public Accounts Committee (PAC), in its latest report, revealed that the cabinet had approved the plan on Aug 14 last year. It entails acquiring a 51 per cent stake in CRRC Rolling Stock Center (Malaysia) Sdn Bhd (CRRC) through a local firm or government-linked company.
However, Transport Ministry secretary-general Datuk Jana Santhiran Muniayan told the PAC on Feb 12 this year that negotiations with CRRC had yet to take place.
CRRC, which operates an assembly plant in Batu Gajah, Perak, is currently 70 per cent owned by CRRC Zhuzhou Locomotive Co Ltd, with the remaining 30 per cent held by CRRC (Hong Kong) Co Ltd.
The 30-year leasing plan covers 62 new passenger train sets from China, to be delivered by 2027, along with maintenance, repair and overhaul services.
In the report released yesterday, PAC noted that the arrangement also requires local content, technology transfer and at least 40 per cent participation from the Malaysian workforce. The public-private partnership unit will spearhead the leasing model.
Jana Santhiran had said that the government opted for direct negotiations with CRRC in the first phase due to the urgent need to speed up the acquisition process.
However, the government intends to conduct an open tender for the second and third phases, in line with cabinet policy, he said.
He explained that CRRC had previously met the supply requirements for electric multiple units, but delays still occurred, resulting in "Liquidated Ascertained Damages" being imposed, including for the Electric Train Service 3 project.
He added that the leasing plan remained under study, and a letter of intent had not been issued to CRRC.
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