KUALA LUMPUR (Aug 20): The government plans to secure a controlling stake in the local unit of Chinese rolling stock assembler, as part of its proposal to lease 62 train sets. The plan, which received Cabinet approval on Aug 14 last year, involves acquiring a 51% stake in CRRC Rolling Stock Center (Malaysia) Sdn Bhd through a local firm or government-linked company, according to the latest Public Accounts Committee report. The move is aimed at ensuring majority control, as well as technology transfer to local players. Branded A prime address near the fairways Step into a lifestyle of understated luxury and tranquillity at Suria Heights, an exclusive residential enclave with a resort-like ambience nestled in the heart of Bandar Sri Sendayan, Seremban, Negeri Sembilan. However, no formal negotiations have been held with the Chinese firm, Transport Ministry secretary general Datuk Jana Santhiran Muniayan said at the committee’s proceedings on Feb 12 this year. CRRC Rolling Stock Center (Malaysia) — which operates an assembly plant in Batu Gajah, Perak — is currently 70% owned by CRRC Zhuzhou Locomotive Co, Ltd, with the remaining 30% held by CRRC (Hong Kong) Co Ltd. Malaysia planned to lease 62 new passenger train sets from China by 2027, at a cost of RM10.7 billion for 30 years for Keretapi Tanah Melayu Bhd, the national railway company more commonly known as KTM. The leasing arrangement, which includes maintenance, repair and overhaul, is intended to ensure that KTM has a sufficient number of trains in service. In its latest report released on Wednesday, the bipartisan parliamentary committee noted that the decision also requires local content with technology transfer, and at least 40% local workforce participation. The leasing model will be spearheaded by the Public-Private Partnership Unit. Transport Ministry’s Jana said the government opted for direct negotiations with CRRC for the first phase of the project due to the urgent need to speed up the acquisition, as well as the company’s experience and expertise. However, the government intends to conduct an open tender process for the second and third phases, in line with Cabinet policy, he noted. CRRC had met its obligations in supplying electric multiple unit (EMU) trains to KTM in the past, though it was penalised for delays, including in the ongoing ETS 3 project, according to Jana. He stressed that the leasing of EMU trains has yet to be finalised and remains at the study and refinement stage, with no letter of intent issued to date. Recommendations The committee also urged the government to strengthen oversight and ensure transparency in the proposed leasing of EMU trains. Among its key recommendations, the committee said the government should complete a detailed study by UKAS comparing the leasing model with outright purchase, including a long-term cost-benefit analysis, with the findings made public. Each procurement phase — particularly the first phase involving direct negotiations — must be backed by strong justification and thorough due diligence before any financial commitments are made. Other recommendations include finalising the payment currency, either ringgit or yuan, after assessing long-term stability; ensuring lease agreements clearly define maintenance responsibilities, including spare parts and major repairs, to avoid hidden costs; and ensuring leased trains meet the highest safety and quality standards while remaining compatible with Malaysia’s rail infrastructure. The government should also promote greater participation of local companies in the maintenance of existing trains through open tenders, the committee added.
