KTM Update: Former MD speaks up

The former Managing Director of KTM Berhad Radzak Abdul Malek has written the following letter published in the local media, explaining the purchase of the controversial DMU trainsets and the allegations of impropriety.

KTMB’s DMU purchase aboveboard, reasonable (Malaysiakini)

18 November 2009
Radzak Abdul Malek

I refer to media reports about KTM Bhd’s purchase of Diesel Multiple Units (DMUs) from Spain. As the former KTMB managing director (MD), I feel compelled to clear the air over some of the inaccuracies contained in these reports.

Firstly, I want to put on record that the DMUs were bought under the government’s stimulus package. The purchase was necessary to overcome serious capacity issues involving KTM Komuter’s services.

During my tenure as KTMB MD, one of my main priorities was to resolve the problem of insufficient trains, faced by the public who used the KTMB Komuter services, especially in the Klang Valley. With public complaints mounting, it was a problem that needed to be resolved fast.

With funds available from the stimulus package, the Transport Ministry quickly proposed that the used DMUs be bought as a stop-gap measure. We bought used DMUs and not Electric Multiple Units (EMUs) because there were no used EMUs readily available anywhere in the world then.

Purchasing new sets would require a waiting time of between two-and-a-half to three years – a delay KTMB can ill-afford as it aspired to provide the best services to the public, especially those using its Komuter services.

It is also not true that I went against the KTMB board’s decision not to purchase the DMUs. While the board had earlier turned down the proposal to buy the DMUs, the decision was taken before I joined KTMB as its MD and I was completely in the dark over the decision.

Besides, at that time, KTMB had very little choice but to urgently overcome capacity problems following a surge in demand for its Komuter services.

On the purchase price of the DMUs, the Transport Ministry had in a statement on Nov 11 clarified that each set of the DMU cost Euro 1.492 million per set, cheaper than the units bought by Costa Rica, at Euro two million per set.

[TRANSIT: According to Railway Gazette’s World Rolling Stock Market March 2009, the purchase was Euro 2 million for 4 sets of trains.

“Costa Rica: Incofer is to purchase an additional four Class 2400 DMUs from Spanish metre-gauge operator FEVE for €2m. FEVE will also provide technical assistance and training.”]

Claims that the sets bought by KTMB were more expensive are grossly untrue.

[TRANSIT: The numbers above suggest otherwise. Of course, it could be an error on their part. So why not request an outside audit or ask the Public Accounts Committee or the Auditor General’s Office to investigate. You have nothing to fear.]

Lastly, I wish to make it very clear that the purchase of the DMUs was above board and made in the best interests of KTMB and the public who use its Komuter services. Insinuations or claims otherwise are grossly untrue and malicious.

TRANSIT Says:
Frankly, this is sad and disappointing. While we appreciate the explanation by the former Managing Director of KTMB, we at TRANSIT cannot agree with the statement that the purchase of the DMUs was made “in the best interests of KTMB and the public who use its services.”

Frankly, if KTMB, the Ministry of Transport and the government were acting in the best interests of KTMB and the public, they would have arranged for the purchase of 30 EMU trainsets (6 carriage) or 60 EMU trainsets (3 carriage) back in 2006, when they were told that it was necessary to expand on KTM service.

The easiest way to resolve this issue is to open up the books of KTMB and the Ministry of Transport and Ministry of Finance to the Public Accounts Committee and the Auditor General’s Office. Let’s see if KTMB really paid Euro1.492 million as claimed by KTMB / MoT or if they paid the Euro 6million as alleged.

Moaz Yusuf Ahmad of TRANSIT told all Malaysians back in 2006 that we needed to buy more trains for KTM Komuter service. Because the government refused to listen then, they put themselves in the situation that they are in now.

So we agree with the growing call to probe [the] rail deal linked to [the] transport minister.

But do not forget…there are many other deals that need to be probed. We should not be penny wise and pound foolish, calling loudly for probes over a few misplaced millions but failing to investigate a few misplaced billions.

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