PAC urges direct negotiations for EMU train lease procurement
Public Accounts Committee chairman Datuk Mas Ermieyati Samsudin revealed this recommendation following the committee's statement presentation today.
She stated that strong justification and comprehensive due diligence must support every procurement phase, particularly Phase 1 involving direct negotiations.
The PAC examined three key witnesses including MOT secretary-general Datuk Jana Santhiran Muniayan on February 12.
Committee findings indicate the EMU train procurement decision remains unfinalized and currently stays in study phase.
The process continues undergoing refinements with ongoing negotiations involving central agencies like the Ministry of Finance.
An initial announcement estimated RM10.7 billion for 62 train sets over three decades.
Mas Ermieyati clarified this figure remains merely an estimate without finalized cost details through formal supplier negotiations.
The leasing model selection over outright purchase considered government financial constraints and urgent train procurement needs.
This approach addresses demand fulfillment and resolves delay or shortage issues effectively.
The PAC recommends government completion of a detailed Public Private Partnership Unit study comparing leasing versus purchase models.
This analysis must include long-term cost-benefit assessment with transparent public findings announcement.
Mas Ermieyati emphasized that lease agreements must clearly define supplier-borne maintenance scope including spare parts and major repairs.
This clarity prevents hidden costs from burdening the government unexpectedly.
The Ministry of Transport must ensure leased trains meet highest quality and safety standards consistently.
Compatibility with Malaysia's existing rail infrastructure remains another critical requirement for successful implementation. - Bernama
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Govt seeking control of local Chinese rolling stock arm in RM10.7b train deal
Your browser does not support the audio element. 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.
The Sun
14 hours ago
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PAC urges direct negotiations for EMU train lease procurement
KUALA LUMPUR: The Ministry of Transport, Railway Assets Corporation and Keretapi Tanah Melayu Berhad must ensure each stage of electric multiple unit train set procurement occurs through direct negotiations before financial commitments are made. Public Accounts Committee chairman Datuk Mas Ermieyati Samsudin revealed this recommendation following the committee's statement presentation today. She stated that strong justification and comprehensive due diligence must support every procurement phase, particularly Phase 1 involving direct negotiations. The PAC examined three key witnesses including MOT secretary-general Datuk Jana Santhiran Muniayan on February 12. Committee findings indicate the EMU train procurement decision remains unfinalized and currently stays in study phase. The process continues undergoing refinements with ongoing negotiations involving central agencies like the Ministry of Finance. An initial announcement estimated RM10.7 billion for 62 train sets over three decades. Mas Ermieyati clarified this figure remains merely an estimate without finalized cost details through formal supplier negotiations. The leasing model selection over outright purchase considered government financial constraints and urgent train procurement needs. This approach addresses demand fulfillment and resolves delay or shortage issues effectively. The PAC recommends government completion of a detailed Public Private Partnership Unit study comparing leasing versus purchase models. This analysis must include long-term cost-benefit assessment with transparent public findings announcement. Mas Ermieyati emphasized that lease agreements must clearly define supplier-borne maintenance scope including spare parts and major repairs. This clarity prevents hidden costs from burdening the government unexpectedly. The Ministry of Transport must ensure leased trains meet highest quality and safety standards consistently. Compatibility with Malaysia's existing rail infrastructure remains another critical requirement for successful implementation. - Bernama
Barnama
14 hours ago
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PAC: MOT, RAC, KTMB Must Ensure EMU Train Lease Procurement Via Direct Negotiations
KUALA LUMPUR, Aug 20 (Bernama) -- The Ministry of Transport (MOT), the Railway Assets Corporation (RAC) and Keretapi Tanah Melayu Berhad (KTMB) must ensure that each stage of the procurement of electric multiple unit (EMU) train sets on lease is conducted through direct negotiations before any financial commitment is made, according to the Public Accounts Committee (PAC). PAC chairman Datuk Mas Ermieyati Samsudin said this was among the recommendations put forward after the committee tabled its statement on the EMU train procurement today. 'MOT, RAC and KTMB must ensure that each phase of the procurement, particularly Phase 1, which involves direct negotiations, is backed by strong justification and a comprehensive due diligence study before any financial commitment is made,' she told a press conference at the Parliament building today. She said that as of Feb 12, the PAC had called three main witnesses, namely MOT secretary-general Datuk Jana Santhiran Muniayan, RAC chief executive officer Datuk Azhar Ahmad and KTMB chief executive officer Datuk Mohd Rani Hisham Samsudin. Based on the proceedings, Mas Ermieyati said the PAC found that the EMU train procurement decision had yet to be finalised and remained at the study stage, with the process still being fine-tuned and negotiations ongoing with central agencies, including the Ministry of Finance. 'Although there was an initial announcement of an estimated cost of RM10.7 billion for 62 train sets over 30 years, this figure remains only an estimate and no cost details have been finalised through formal negotiations with the supplier. 'The leasing model was chosen over outright purchase in view of the government's financial constraints and the need to speed up the procurement of trains to meet demand and deal with the issue of delays or shortages,' she said. Therefore, she said the PAC recommended that the government complete the detailed study by the Public Private Partnership Unit (UKAS) on the comparison between the leasing model and outright purchase, including a long-term cost-benefit analysis, and announce the findings transparently to the public. Mas Ermieyati said the MOT, RAC and KTMB must ensure that the lease agreement clearly defines the scope of maintenance borne by the supplier, including spare parts and major repairs, to prevent hidden costs to the government.
