RM500m govt fund for public transport

BPMB is especially keen on projects that address last-mile connectivity woes

By MARK RAO / Pic By TMR

All transport operators, including e-hailing firms, will be considered for Bank Pembangunan Malaysia Bhd’s (BPMB) public transport fund — provided that they contribute to the improvement of Malaysia’s last-mile connectivity.

With support from its sole shareholder, Minister of Finance Inc, the development bank is making available up to RM500 million in financing to all eligible parties who help improve the country’s public transportation infrastructure.

Its chairman Datuk Zaiton Mohd Hassan said the fund is aimed at investing in infrastructure to facilitate a higher take-up of public transport services nationwide.

She said the bank is especially keen on projects that address last-mile connectivity woes, as ease of transport to and from bus and train stations is key in facilitating greater public transport coverage.

“I don’t think we’ll exclude any sector right now, so if there is an interesting project that is put before us, we will consider it,” she said in response to questions on whether the bank will consider non-traditional transport operators such as e-hailing firms.

President and group CEO Arshad Mohamed Ismail said any company involved in the provision of transportation can apply for the financing as each application will be evaluated based on the terms and conditions imposed upon the bank.

“The idea is to make it relatively easy for worthy projects to be financed under this transportation fund,” he said at the fund’s launch in Kuala Lumpur yesterday.

Up to RM500 million in financing will be made available for Malaysian companies via the fund for the purchase of taxis, buses and other vehicles used for public transport.

The fund, which carries a 2% financing rate subsidy, can also be utilised by public transport operators, suppliers, manufacturers, assemblers and contractors, as well as the developers of these infrastructure.

Local e-hailing firms present a unique opportunity for the fund to develop Malaysia’s last-mile connectivity needs as these providers reportedly boast around 300,000 drivers nationwide. Grab is Malaysia’s largest ride-sharing company.

Arshad added that the 2% subsidy included in the financing provides an attractive value proposition for the interested parties, while financing rates are contingent on the creditworthiness of the respective applicants.

“This will be in line with market financial rates, but when you incorporate a subsidy in the financing arrangement, it will definitely be quite attractive for any applicant.”