Tuesday, 10 December 2019

Is KTM Challenging Passengers’ Tolerance?


“Terima kasih atas kesabaran anda...” If you are a frequent KTM user, you definitely have heard this before. Many times when there are delays or when the trains stop in the middle of nowhere to wait for a signal clearance, the train drivers make such an announcement. They ask their passengers to wait patiently. But today, the passengers no longer wish to “SABAR”.

Keretapi Tanah Melayu Bhd (KTMB) has accumulated losses of RM2.829 billion as of Dec 31 last year. Among the reasons for the losses, according to the Auditor-General's Report 2018 Series 2, was that KTMB was not given the freedom to make its own decision, particularly on the company's operations and usage of assets. The company is bound by the government’s policy in determining train fares.

In 2015, KTM Komuter increased its fares by 4 sen per km on average for the Tanjung Malim-Sungai Gadut and Batu Caves-Port Klang routes. However, they were still unable to cover operational costs with the increase.

Source: The Star (3 Nov 2015)

Train fares may have increased yet the quality of the service is no better. The delay in completing the Klang Valley Electrified Double Track project is disrupting the daily routine of the passengers. The actual number of passengers and revenue showed a drop since 2016 to July 2019. Over 60% of passengers have switched to other modes of transport, according to the report.

According to the latest train schedule (Dec 2019), there were 40 Electric Train Services (ETS, inter-city rail service) travelling between Ipoh and KL, daily. What about the Komuter in the Klang Valley? There are only 26 Komuters travelling between Tanjung Malim and Sungai Buloh (which is connected with MRT to KL Sentral) daily. The longest waiting time for Komuter was 256 minutes (4 hours 16 minutes) compared to 45 minutes as set by the Land Public Transport Agency (APAD)!

Foreign rail operators such as Japanese National Railways (JRs) and Hong Kong’s MTR on the other hand are making profits. In Japan, privatization allowed the JRs to operate commercial and real estate businesses. Today, non-transportation revenue makes up roughly a third of JR East’s revenue, including revenues from shopping centres, restaurants, and hotels. Hong Kong’s MTR similarly, is operating through their ‘rail plus property’ model. Once they build the railway, the land value rise and they capture the increase in value. This model has allowed the company to keep fares cheap and make the company completely self-sustaining.

For KTMB, the Komuter service contributed the highest revenue to KTMB from 2015 to 2017 before factoring its operating cost. Railway operators are commonly known to have high level of fixed operating cost. Therefore, increasing the train load factor by cutting down the train frequency perhaps is not a good idea. The operator needs to focus not only on the load factor but ridership as well. Since both ETS and Komuter are sharing the same track, KTMB could perhaps reduce the inter-city ETS frequency on weekdays (or at least Mondays to Thursdays) to increase train frequency for the Komuter. Sufficient maintenance and upgrades for both trains and stations could be scheduled and followed accordingly by KTMB. Increases in train frequency and punctuality boost passengers’ confidence and ridership will certainly flood back.


Reference:

1. Lacking freedom, KTM piles up RM2.8 billion losses, audit shows, 3 Dec 2019, Bernama
2. KTM Komuter fares up next month, 3 Nov 2015, The Star
3. Eleanor Warnock, Lessons from Railway Privatization in Japan www.tokyoreview.net
4. Matthew Keegan, How public transport actually turns a profit in Hong Kong


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