Railway Assets Corp to be revamped with GM’s departure?

Azhar’s contract said not to be renewed and his replacement is expected to come from within govt

by AFIQ AZIZ/ graphic by MZUKRI

THE Railway Assets Corp (RAC), which currently manages rail properties worth a staggering RM40 billion, is expected to undergo a restructuring exercise which includes the departure of its current GM Azhar Ahmad.

Azhar, while confirming that he would vacate his seat “soon” with The Malaysian Reserve yesterday, also expressed his hope that all the strategic initiatives which have been put in motion earlier will be executed according to plan.

“My role is very sensitive as it involves the sustainable future of Malaysia. It is crucial that these strategic initiatives are executed efficiently. Otherwise, it will be a loss not just for the rail industry, but for the country as a whole.”

A source who is in the know said that Azhar, the first corporate man ever appointed to the post, is expected to leave the 28-year-old federal statutory body, which is parked under the Ministry of Transport, by this week.

The source added that Azhar’s contract with RAC, which began on Aug 7, 2018, is not expected to be renewed, while his replacement would be nominated from within the government.

The source said the new head is expected to spearhead strategies to mobilise RM40 billion RAC assets, as well as steer the growth of the rail industry.

According to his LinkedIn account, Azhar, who is a University of London law graduate, has 20 years experience in various sectors including property, transport and logistics.

Prior to RAC, he was attached to the now defunct Land Public Transport Commission (SPAD), Pos Malaysia Bhd, Rapid Penang Sdn Bhd and MMC Corp Bhd.

For the past two years, RAC, which was formed in 1992 upon the privatisation of Keretapi Tanah Melayu Bhd (KTMB), had managed to unlock almost 500 acres (202ha) of land in Johor, Ipoh and Selangor through strategic initiatives.

RAC has also unlocked RM1 billion in land value through transit-oriented development (TOD), which was previously abandoned or unexplored by the corporation.

TOD planning typically comprises a central transit stop surrounded by high-density population, equipped with multiple public transport modes with a design that is more walkable with small built-up areas.

Analysts estimated that such a concept could create profit diversity for railway companies, akin to the idea that is used in Hong Kong.

RAC is also implementing a business plan that is expected to generate RM2.2 billion of revenue over the next five years.

The country’s rail industry transformation agenda also assigned RAC to monetise assets — mainly land parcels and 1,600km of railway tracks previously belonging to KTMB.

This was to repay the state rail operator’s debt of RM2.1 billion, which was absorbed by RAC in 1992. For the record, the separation of assets in 1992 was carried out as the government wanted the debt-ridden KTMB to focus on increasing its operation efficiency, while RAC became the asset owner.

Until now, it is believed that about half of the KTMB’s debt has been paid by RAC.

However, recent reports stated that KTMB wanted to reclaim the assets via a proposal to merge the rail operator and RAC, which was forwarded to the government in May.

It was also part of KTMB’s move to set aside the long due Railway Network Access Agreement (RNAA) established in December 2016. Under the RNAA, KTMB was required to pay access charges to RAC, including in the use of its “formerly owned” railway tracks.

RAC argued that this model was to emulate the successful system seen in the UK and Japan. RNAA has been deferred until now due to the disagreement between KTMB and RAC.

In June, Transport Minister Datuk Seri Dr Wee Ka Siong dismissed the “vertical integration” proposal by KTMB.

Wee said he will find a win-win solution to ensure both KTMB and RAC will be continuously sustainable, while remaining separate.