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.

She said the MOT must also ensure that the leased trains meet the highest quality and safety standards and are compatible with Malaysia’s existing rail infrastructure.

--BERNAMA