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KLIG to grow LRT services
BY JOSE BARROCK
KL Infrastructure Group Bhd (KLIG), operator of the KL Monorail System Sdn Bhd, is in talks to buy Projek Usahasama Transit Ringan Automatik Sdn Bhd (Putra) and Sistem Transit Aliran Ringan (STAR) from the government.
Sources say the group has made an offer for the two LRT service providers but has yet to get a response from the government. Another source, however, says such plans by KLIG are simply in the exploratory stage.
“The talks are still at an early stage and the details are only now being negotiated,” says an industry source.
A market observer says this may be part of a long-term plan to merge all three LRTs and KLIG is likely to satisfy the purchase via the issuance of shares.
The RM1.2 billion KL Monorail is KLIG's flagship project and it holds a 40-year concession.
Several months back, KLIG executive director Al-Jeffery Ibrahim had said there will eventually be plans to connect the KL Monorail stations to the STAR and Putra stations in line with integrating the rail networks.
A few analysts say KL Monorail, which was launched only recently, may have a spark of hope given that it's relatively smaller. KL Monorail can ferry up to 85,000 passengers per day.
An industry observer says the interest by KLIG partly stems from the fact that the government is planning to introduce laws curbing single motor vehicle use in the city centre to address the issue of traffic congestion in Kuala Lumpur. This, it is perceived will lead to more passengers using LRT services.
It has become particularly compelling for KLIG to look for new growth opportunities particularly given that several potential rail building and development projects abroad namely in Dubai and Indonesia have started to wane.
Both the two LRT systems, Putraline and Starline, come with excess baggage, carrying a combined debt of some RM6 billion. Their financial woes are largely due to high cost of borrowings and huge infrastructure costs against low fares.
Renong Bhd was the operator of Putra LRT while Star LRT's shareholders were Britain-based Taylor Woodrow plc, the local Employees Provident Fund and Lembaga Tabung Haji, among others.
Both loss-making LRT systems have since been merged under Syarikat Prasarana Bhd, a wholly-owned subsidiary of the Minister of Finance with the government body holding some 80 per cent of both the companies.
On the other hand, a few analysts say KL Monorail, which was launched only recently, may have a spark of hope given that it's relatively smaller. KL Monorail can ferry up to 85,000 passengers per day.
In addition, the cost of KL Monorail was also lower at RM1.2 billion compared to Putra, which cost RM2 billion and STAR, RM3.5 billion.
Over and above that, KLIG, as it has frequently asserted, is also involved in property and media (leasing of advertising panels).
The company's involvement in the property business is via Jalan-Jalan - a 30,000 sq feet urban renewal project expected to be open for business by year-end.
As for the advertising panels, they will be on monorail columns and structures, and in the trains and stations. There are also plans to have plasma display screens. The train bodies too will be available for advertising purpose.
Mayban Securities, in an earlier report, projected that the company will make losses of between RM1.2 million and RM31.1 million between FY04 and FY09. The research house expects the group to break even in 2010 with a net profit of RM28 million.
However, the company is more optimistic. KLIG, in the prospectus, said it expects to be profitable from the year ending April 30, 2007, with a profit after taxation of about RM2 million.
Executive director of KLIG Al-Jefferey Ibrahim has also said that the company may break into the black earlier than 2007, spurred on by new deals abroad, in the likes of China, Sri Lanka, and Middle Eastern countries among others.
KLIG is part of the engineering and construction group MTrans Holdings Sdn Bhd that holds a 52.6 per cent stake in the former. Syarikat Prasarana Negara Bhd (SPNB), which has a 10 per cent interest in KLIG, took over the two loss-making urban rail operators Putra and STAR in June last year.
MTrans Holdings is also the holding company for Monorail Malaysia Technology Sdn Bhd, one of only three companies in the world other than Bombardier of Canada and Japan based Hitachi, which supply monorail systems.
KLIG's parent MTrans Holdings is already in the running to construct a RM4.5 billion monorail project in Dubai and a RM1.5 billion rail project in Indonesia and is looking to venture into other markets aggressively.
The optimism does not only stem from possible ventures abroad. Al-Jeffrey had also said the development of an 18-kilometre LRT system in Putrajaya, the federal administrative capital, which will be operational by end 2004 and operated by KLIG, will help hasten the break-even point for the company.
BY JOSE BARROCK
KL Infrastructure Group Bhd (KLIG), operator of the KL Monorail System Sdn Bhd, is in talks to buy Projek Usahasama Transit Ringan Automatik Sdn Bhd (Putra) and Sistem Transit Aliran Ringan (STAR) from the government.
Sources say the group has made an offer for the two LRT service providers but has yet to get a response from the government. Another source, however, says such plans by KLIG are simply in the exploratory stage.
“The talks are still at an early stage and the details are only now being negotiated,” says an industry source.
A market observer says this may be part of a long-term plan to merge all three LRTs and KLIG is likely to satisfy the purchase via the issuance of shares.
The RM1.2 billion KL Monorail is KLIG's flagship project and it holds a 40-year concession.
Several months back, KLIG executive director Al-Jeffery Ibrahim had said there will eventually be plans to connect the KL Monorail stations to the STAR and Putra stations in line with integrating the rail networks.
A few analysts say KL Monorail, which was launched only recently, may have a spark of hope given that it's relatively smaller. KL Monorail can ferry up to 85,000 passengers per day.
An industry observer says the interest by KLIG partly stems from the fact that the government is planning to introduce laws curbing single motor vehicle use in the city centre to address the issue of traffic congestion in Kuala Lumpur. This, it is perceived will lead to more passengers using LRT services.
It has become particularly compelling for KLIG to look for new growth opportunities particularly given that several potential rail building and development projects abroad namely in Dubai and Indonesia have started to wane.
Both the two LRT systems, Putraline and Starline, come with excess baggage, carrying a combined debt of some RM6 billion. Their financial woes are largely due to high cost of borrowings and huge infrastructure costs against low fares.
Renong Bhd was the operator of Putra LRT while Star LRT's shareholders were Britain-based Taylor Woodrow plc, the local Employees Provident Fund and Lembaga Tabung Haji, among others.
Both loss-making LRT systems have since been merged under Syarikat Prasarana Bhd, a wholly-owned subsidiary of the Minister of Finance with the government body holding some 80 per cent of both the companies.
On the other hand, a few analysts say KL Monorail, which was launched only recently, may have a spark of hope given that it's relatively smaller. KL Monorail can ferry up to 85,000 passengers per day.
In addition, the cost of KL Monorail was also lower at RM1.2 billion compared to Putra, which cost RM2 billion and STAR, RM3.5 billion.
Over and above that, KLIG, as it has frequently asserted, is also involved in property and media (leasing of advertising panels).
The company's involvement in the property business is via Jalan-Jalan - a 30,000 sq feet urban renewal project expected to be open for business by year-end.
As for the advertising panels, they will be on monorail columns and structures, and in the trains and stations. There are also plans to have plasma display screens. The train bodies too will be available for advertising purpose.
Mayban Securities, in an earlier report, projected that the company will make losses of between RM1.2 million and RM31.1 million between FY04 and FY09. The research house expects the group to break even in 2010 with a net profit of RM28 million.
However, the company is more optimistic. KLIG, in the prospectus, said it expects to be profitable from the year ending April 30, 2007, with a profit after taxation of about RM2 million.
Executive director of KLIG Al-Jefferey Ibrahim has also said that the company may break into the black earlier than 2007, spurred on by new deals abroad, in the likes of China, Sri Lanka, and Middle Eastern countries among others.
KLIG is part of the engineering and construction group MTrans Holdings Sdn Bhd that holds a 52.6 per cent stake in the former. Syarikat Prasarana Negara Bhd (SPNB), which has a 10 per cent interest in KLIG, took over the two loss-making urban rail operators Putra and STAR in June last year.
MTrans Holdings is also the holding company for Monorail Malaysia Technology Sdn Bhd, one of only three companies in the world other than Bombardier of Canada and Japan based Hitachi, which supply monorail systems.
KLIG's parent MTrans Holdings is already in the running to construct a RM4.5 billion monorail project in Dubai and a RM1.5 billion rail project in Indonesia and is looking to venture into other markets aggressively.
The optimism does not only stem from possible ventures abroad. Al-Jeffrey had also said the development of an 18-kilometre LRT system in Putrajaya, the federal administrative capital, which will be operational by end 2004 and operated by KLIG, will help hasten the break-even point for the company.
