Transport Minister Anthony Loke stated that the Malaysian Railway Asset Corporation (RAC) signed a 'Pay-as-You-Use' contract with SMH Rail Sdn Bhd, which will reduce dependence on government allocations, while providing a more sustainable, flexible, and competitive railway transport system.
He witnessed the official launch of the 'Pay-as-You-Use' freight railway locomotive and carriages today.
He said that the contract between the Malaysian Railway Asset Corporation and SMH Rail Sdn Bhd was signed in March last year. Under this agreement, locomotives and carriages owned by the Malaysian Railway Asset Corporation, which are damaged, are sold to SMH Rail, refurbished by the private company, and then leased back to the Malaysian Railway Asset Corporation after ensuring they are usable.
He stated that this public-private partnership model proves to be helpful in driving economic growth without fully relying on government resources.
At a later press conference, Anthony Loke mentioned that in the past, many operators requested Malayan Railways Company to transport goods for them, but due to insufficient locomotives, the company was unable to handle more freight services.
“Malayan Railways Company received requests to transport containers, but previously, due to inadequate locomotives, we could not take up the business.”
He believes that the 'Pay-as-You-Use' plan is a multi-benefit strategy. Besides reducing dependence on government allocations, it can enhance Malayan Railway Company's freight services and reduce carbon emissions.
He pointed out that the railway freight sector has great development potential, with Malayan Railways Company processing 6 million tonnes of cargo in 2024, a 15% increase from 2023.
He said, with the economic recovery of the country and the growth of regional trade, Malayan Railways Company expects the volume of domestic and cross-border cargo transported by rail to grow by 10% annually.
Anthony Loke said that under the leasing arrangements provided by SMH Rail Sdn Bhd, services include the repair and updating of 44 locomotives for the Malaysian Railway Asset Corporation, subsequently leasing them back to the Malayan Railways Company; leasing 6 new locomotives directly to Malayan Railways Company; providing the Malaysian Railway Asset Corporation and Malayan Railways Company with 245 and 204 new carriages, respectively, for freight leasing purposes, each capable of bearing 20 tonnes of axle load and a maximum carrying capacity of 60 tonnes.
He hopes other private sectors can emulate SMH Rail's approach to jointly strengthen the railway industry in the country.
“With a more modern railway system, sustainable financing, and flexible leasing models, I believe Malaysia is on the right track towards developing a more efficient, safer, and competitive railway transport industry.”