FUTURE RAIL 2030

Malaysian Industry-Government Group

for High Technology

Malaysian Rail
Industry

A SNAPSHOT

MIGHT Copyright 2011 Proprietary and Confidential

 Introduction

MIGHT Copyright 2011 Proprietary and Confidential

 Right Climate for Rail? - Global

Global megatrends indicate rail will be a solution to future mobility

Climate Change Urbanization & Congestion Oil Scarcity & Price of

population growth Energy
Greener choice of Urbanization increase Wastage of time & energy Volatility of price &
transportation with population increase consumption
Co2 emission per pax1. No. of people transported per World Energy Consumption4
World Population2
24.3
hour in urban environment3 (quadrillion btu)
9.0 50,000 Non-OECD 770
kg/100km

OECD
Billion

8.0 671
573
7.0 22,000 505
6.0
9,000
2.5 2.2 2,100

Airplane Hybrid Car Train 1999 2011 2027 2046 Car Bus Tram Metro 2008 2015 2025 2035

MIGHT Copyright 2011 Proprietary and Confidential

1 - most eco mean of travel, Doritix 2 worldometers.info 3 UN Department of Economic & Social 4 US Energy Info. Admin.
 Right Climate for Rail? - Local

Rail is one of important elements in national development agenda

Industrial Master Plan 3

National Industrial
ETP GTP 10th Malaysia Plan Development Plan
Greater Kuala Lumpur/ Improving Urban Public (2011 2015) Facilitating overall logistics
Klang Valley Transport development as well as
Improve vehicle availability developing rail freight
Connecting to Singapore service.
via a high speed rail RM2.8bil is allocated for
Improve reliability &
system improving urban public
journey times
transport in the first two Other Initiatives
Improve accessibility & years of the 10th Malaysia
Building an integrated Plan. Green Technology Policy
connectivity
urban mass rapid transit
system States Development
Regulatory restructuring
Initiatives

MIGHT Copyright 2011 Proprietary and Confidential

 Future Plan Rail Investment

Leverage on rail investments that in the pipeline until 2030 and beyond

Line Extension Integrated Transport Terminal (ITT) Pre 2020 Putrajaya/KL Monorail
Projects Subang Jaya, Batu Caves/ Rawang/
Penang Seremban/ Klang- KL
Pre 2030
LCCT, Sepang Sentral KTMB Line
LRT (Kelana Jaya
Senai Airport Freight Relief Line
Klang)
KTMB Feeders Outer Orbital Line

2013 2014 2015 2016 2017 2018 2019 2020 2030

Electrified MRT1 High Speed Rail MRT2/MRT3 Swak Railway Track

Integrated Urban Mass Systems (Similajau Tanjung
Double Tracking Rapid Transit Systems 1 Manis)
Project
MIGHT Copyright 2011 Proprietary and Confidential
Source: Urban Rail Development Plan, SPAD Source: NKEA: Greater KL / Klang
 Key Enabler to the National Agenda
Most of the Government agenda are centred around rail operation and less
emphasis on developing the supporting industry around the operation

Regulatory/Policy Making

Asset Management Rail Operation

Maintenance, Repair
& Overhaul

Design, Systems Integration

Manufacturing Rail Training
& Assembly
Other Services

MIGHT Copyright 2011 Proprietary and Confidential

 The Initiative
There is a need to outline strategies and action plan to further develop the
Malaysian rail industry

Common Vision & Direction

Trends and Drivers Required Technologies and
Key Focus Areas Capabilities
Market Opportunities Consolidation of industry players
Human Capital Requirements Potential quick-wins
Supply & Value Chain Enhancement Roles of Stakeholders
Effective Implementation

MIGHT Copyright 2011 Proprietary and Confidential

 Where are we now?

MIGHT Copyright 2011 Proprietary and Confidential

 Malaysia Rail Industry In Brief
Rail Industry Turnover 2010
Rail related activities has been more than 25.9
25.5
100 years with investment more than RM

RM Billion
100 billion since 1990s 7.26
3.5*
RM Billion
KV/MRT
40.0 Shipbuilding & Rail Automotive Aerospace
Shiprepair
30.0 Double Tracking KL LRT Expansion/
20.0 Upgrading
Total Employment = 9,000 workers*
Source: MIGHT
10.0 Johor Double Tracking
Passenger VS Freight
6,000
4.0
5,000
PUTRA (LRT)
ERL
3.0 4,000
KTMB R-S
3,000
2.0 STAR (LRT) Monorail 2,000 Railway Passenger ('000)
EMU (Commuter) Sabah Railway
1.0 Commuter Rehab Modernization 1,000 Cargo Handled ('000 tonnes)
KTMB R-S
0

1990 1995 2000 2005 2010

MIGHT Copyright 2011 Proprietary and Confidential
* Estimated figure (working-in-progress)
 Malaysia Rail Industry Structure
More than 150 organisations were identified supporting rail operation, only
approximately 60 organisations directly involve in rail related activities

Regulator/Policy Making

Asset Management Rail Operation

Maintenance, Repair
& Overhaul

Design, Systems Integration

Manufacturing Rail Training
& Assembly
Other Services

MIGHT Copyright 2011 Proprietary and Confidential

 Regulatory & Policy Making Group
Rail industry involves cross-ministerial and intervention from various
Governments related organisations
Agency Areas of Responsibility
Ministry responsible for putting modern, efficient and safe rail transport system to
1 MOT facilitate Malaysias economy.

Responsible for issuance of licences, regulates and enforces all matters relating to rail
2 SPAD transport activities within land public transport system
Federal Statutory Body under MoT established to manage of all railway assets and
3 RAC liabilities, financing and execute the development and redevelop the railway
infrastructures.
Responsible for formulating policies & strategies for development of transport &
4 MITI logistics sector.

5 Responsible for export promotion in promoting Malaysian products which includes

MATRADE transport equipment.
Responsible for preparation of Malaysian Standard for railway engineering and
6 SIRIM construction materials.
MIGHT Copyright 2011 Proprietary and Confidential
 Rail Operation & Asset Management Group
Rail operation has shown a growing trend through expansion
plan of current networks as well as entrant of new rail players

Keretapi Tanah Melayu Wholly-owned Gov. company A government linked

Facilitates, undertakes and company GLC -
92 units (1983, 87, 12 units
expedites public infrastructure implementing Malaysia first
90, 92, 2003, 2005) of EMUs
projects integrated mass rapid transit
219 coaches ERL
railway
Locomotive

58 units (1994 &

1997)
Subsidiary & main operating arm of
Commuter Prasarana Sabah State
Railways
5 units (2009)
A railway system Melaka Tram
ETS and operator in
3189 units Putra LRT Star LRT Monorail
the state of 20 units of
Container flat, 35 sets 30 sets of 6 12 sets of 2 Sabah 2 car trams
domestic, bulk each 2 & 4 car trains car trains
Cargo Wagon cement, flat low car trains
MIGHT Copyright 2011 Proprietary and Confidential
 Rail Operation Group

Local operators provide its services in all segments of rail transportation

Rail Transportation Segments

Intercity Suburban/ High-speed Light Rail Subway/ Cargo
Operators Regional Commuter

MIGHT Copyright 2011 Proprietary and Confidential

 Design, Manufacturing & Assembly
Sub-Sector Turnover
601.3

RM Million
503.9 519.6

Tier 1: Final integrator complete train

Locomotive
EMUs/DMUs 2008 2009 2010
Coaches
Wagon Cargo
Employment Technical &
Non-Technical Workers
Tier 2: Major systems & sub-systems
Technical
integrators 339

Electrical & Electronics Systems Operation 349

Body & Interior
Mechatronics Systems 330 335 340 345 350

Electrification Capabilities Status

Tier 3: Components/Parts
Manufacturers for 32%
45%
None
Rolling Stocks Partial
Signaling & Comm. Full
Tracks Works 23%
Electrification Source: MIGHT

MIGHT Copyright 2011 Proprietary and Confidential

 Maintenance, Repair & Overhaul (MRO)
Rail Assets Sub-Sector Turnover
600.7

RM Million
480

406.15
Rolling-Stocks Signaling & Comm. Tracks & Infra.
MRO Segments

1st & 2nd Level 2008 2009 2010

Maintenance
Employment Technical &
Non-Technical Workers
3rd Level
Maintenance Technical 495

Operation 426
Component
350 400 450 500 550
Maintenance
Capabilities Status
2%
Propulsion
Maintenance 28% None

Partial
Modification/ 70%
Full
Upgrade Source: MIGHT

MIGHT Copyright 2011 Proprietary and Confidential

 Systems Integration
Sub-Sector Turnover
6.6

RM Million
Signalling

1.13
0.5

2008 2009 2010

Employment Technical &

Non-Technical Workers
Communication Operation 70

Technical 144

0 100 200
Capabilities Status
15%
25% Full
Partial
None
60%

Source: MIGHT

MIGHT Copyright 2011 Proprietary and Confidential

 Human Resource Development Group
Type of Human Capital

Internal Training Railway Operation Management & Leadership Rail Industry

Track Maintenance Signalling & Communication
Product Development

Design & Engineering Design Engineer System Analyst

System Analyst
Fabricators
Power Engineer Operation
E&E Engineer
Process Engineer Material Engineer
Software Engineer Chemical Engineer
Testing Engineer
General Skills & Technical
MRO
Maintenance Precision Technician
Technician NDT Inspectors
Mechanics Welder
Metallurgist
Customized training
Manufacturing
Safety Engineers Inspection Engineer
Operation Engineers Incident Management
Maintenance Engineers Train-the-Trainer
Welding Technician
Systems Integration
Policy Support, Standard & Certification

Ministry of Ministry of Malaysian Jabatan Tenaga

Higher Education Qualification Agency SIRIM MITRANS Manusia
Human Resource
MIGHT Copyright 2011 Proprietary and Confidential
 Current Issues & Challenges
Lack of Inter-modal and seamless connectivity High life-cycle support cost

Passenger & Freight INSUFFICIENT RAIL

LACK OF
sharing tracks INFRASTRUCTURE
COMMONALITY
No common standard & Trade Imbalance
Hassle with custom certification Foreign control (Large gap import & export)
clearance Meter gauge to standard gauge Test spec. & parameter
Low product
Reserve land for rail In-house instead of outsourcing localization HIGH DEPENDENCY not provided by OEMs
ON FOREIGN
Lack of product SUPPLIER Certification by OEMs
Unclear policy support Short-term
support shorten project
Lack of dedicated
UNCLEAR life cycle Poaching & Migration
POLICY &
rail incentive INSTITUTIONAL SHORTAGE OF
No industry champion FRAMEWORK SKILLED /
spearhead sub-sector Lack of regulatory KNOWLEDGE In-house training provider
Lack system
development enforcement WORKFORCE
integration
Absent of capabilities Multi-disciplinary skills & knowledge
Noise & environment
coordinating body
issues 2 years gap for new graduate
LACK OF CAPABILITIES Lack of design & full
Entry of short-term players
TO SUPPORT PRODUCT SCADA capability
Poor procurement process LIFE CYCLE Retirement
No dedicated rail course at
Lack of investment in R&D Limited capabilities local universities
in MRO e.g. Level 3
Predictive maintenance in addition to No career prospect towards specialist
Lack of track records
conditioned monitoring capability
Lack of specialized skilled workforce Unattractive relatively with Lack analysis skill in
Lack of certified testing facilities predictive maintenance
other sectors
MIGHT Copyright 2011 Proprietary and Confidential
 Lack of Commonality
Problem Statement

The rolling stock is highly customized as national or private rail operators continue to have specific requirements and
infrastructure constrains. The different technical systems in each rail operators; such as different railway gauges, power
supplies, or automatic train control systems, lead to the different requirements in each case.

Year: 1994 Year: 1997 Year: 1997 Year: 2009 Year: 2012
Produced by: Produced by: Produced by: Produced by: Produced by:
JTS Hungary, Austria UCW South Africa ROTEM, Korea ROTEM, Korea CSR Zhuzhao, China

Impact to the industry

High mix and low volume cause difficulty to localise parts and components due to no economies of scale
User need to keep stock of different type of components and it is not interchangeable
Dependent on OEMs causing long lead time and directly affect serviceability of the train and escalate cost of
procurement and maintenance
MIGHT Copyright 2011 Proprietary and Confidential
 High Dependency on Foreign Supplier

Problem Statement
Currently, railway equipment and rolling stock was imported as part of the drive to modernize rail transport in Malaysia. In
the near future, the means to manufacture and/or maintaining the rolling stock domestically came to be important for the
local rail industry long term sustainability. Specific measures shall be taken in deepening the industry while promoting local
contents.

USD 265 mil USD 18 mil

Source: COMTRADE, 2010

Impact to the industry

Most rolling stocks especially safety related products were manufactured by OEMs. Malaysia seems to be net importer of
railway vehicles equipment and associated equipment if the trend to dependent on OEMs continues.

MIGHT Copyright 2011 Proprietary and Confidential

 Shortage of Required Human Capital

Problem Statement

Public perception on attractiveness of the industry which lesser compared to others e.g. automotive, aerospace and
maritime
Absence of rail related course offered by local universities causing hassle for industry to conduct re-training program
Currently, theres a few institutions develop workforce for rail industry and mostly are conducted in-house while others
are still under planning
Pinching within the industry and migration to other industries and abroad occurring especially for short-term project,
thus hampered the industry to sustaining local employment
Requirement for multi-disciplinary especially to keep up with latest technology

Impact to the industry

Rail industry faced issues human resource competencies such as not enough skilled workforces especially specialized
technical skill. Shortages in rail workforce are largely coming from mechanics and technicians being siphoned off to other
industries and countries.

MIGHT Copyright 2011 Proprietary and Confidential

 Supporting Life-cycle of Rail Assets
Problem Statement

Currently, major MRO jobs are undertaken by the OEMs such as Bombardier, Siemens, Alstom, GE and etc. meanwhile
routine MRO (level 1 and 2) is done by the rail operators. Although theres outsourced activity at a component level and for
non-related safety equipment, the potential size of new rail MRO market is still ambiguous.

Impact to the industry

Malaysias railway rolling stock fleet is aging and a substantial portion of it is already replaced with the new ones. If rail
market shares are to increase, it will provide a better prospect to the supporting industry embarking in rail industry. Hence,
local companies shall improve their capabilities which are critical to a business achieving the competitive advantage.

MIGHT Copyright 2011 Proprietary and Confidential

 Lack of Rail Infrastructure

Problem Statement

One characteristic of the railway system is that there is a strong relationship between infrastructure and railway operations.
Some of the rail infrastructure developed found to be insufficient, not integrated and ill-designed to support the expected
growth rates both freight and passenger traffic over the next decade e.g. currently passenger and freight are sharing the
same track.

Total Route
Gauge Types % world total
KM
Standard
534,686 58.3 %
gauge

Metre gauge 72,880 7.9 %

Narrow gauge 5,903 0.6 %

Impact to the industry

After a long period of investment in rail infrastructure it is now being expanded and modernized. Despite a recent
development of the current gauge as the most cost-effective solution, future rail track appears standardisation of railway
gauges as a way forward for the Malaysian rail. Notwithstanding, the cost of infrastructure standardization is much higher
and also takes considerable time to adopt such a standard e.g. ERTMS (European Rail Traffic Management System).
MIGHT Copyright 2011 Proprietary and Confidential
 Unclear of Industry Institutional Framework
Problem Statement

Transport is a key factor in modern economies. It involves infrastructure and technologies and it forms an impetus for
social and economic development. Similar to other sectors, Rail industry involves various Government
agencies/departments to support overall activities . However, the industry feels that there is no policy direction and
unclear of Governments role in coordinating overall industry development initiative. Due to segregated development of
the rail industry is the reason for longer time take to revitalize the railways in Malaysia.

Malaysian Rail Industry

Impact to the industry

The rail industry in Malaysia is fragmented and relatively small despite being one of the oldest industry
Small domestic market focus lead to unhealthy competition among the local players
More on commercial driven (short-term) less concern over innovation and technology aspects

MIGHT Copyright 2011 Proprietary and Confidential

 Thank You

MIGHT Copyright 2011 Proprietary and Confidential