By Rosli Khan
In the early 1990s, Britain launched a bold privatisation experiment.
It broke up its national rail operator, British Rail, and handed over rail services to private sector operators, with infrastructure ownership vested in a separate entity.
This was touted as a path to greater efficiency, service quality and investment. But it rested on the fallacy that commercial enterprises tend to perform better.
It failed spectacularly. Three decades later, the UK government is nursing the impact and reversing course.
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With the creation of Great British Railways, the government is reuniting operations and infrastructure, and quietly admitting that rail privatisation never delivered on its promises.
Cloning the British mistake
Yet, here, we are still clinging to that same broken model – which then Prime Minister Dr Mahathir Mohamad cloned for Malaysia in the 1990s – and are now paying a heavy price for it.
In 1992, Keretapi Tanah Melayu Berhad (KTMB) became the train operator, while ownership of all rail infrastructure – land, tracks, stations, signals and even the rolling stock – was handed over to a newly established Railway Asset Corporation (RAC).
However, this structural separation has undermined both passenger and freight operations, leading to a long, gradual decline in train service standards, and providing opportunities for the road and highway sector to take over.
Without funds and control over procurement, KTMB cannot invest in any new lines, stations, trains, depots or freight sidings without the RAC’s financial support and approval.
Similar to Railtrack in the UK, the RAC, placed under the Ministry of Transport, owns but does not operate the assets. It is not concerned with commercial train operations and lacks the travel market information, data and analytics needed to respond to any transport market demands.
Rail management in Malaysia suffers from the same issues: misplaced priorities, blurred accountability, a lack of strategic vision, and zero operational agility.
How can we expect to grow a rail network when decision-makers don’t understand the fundamentals – let alone the needs of passengers, the realities of freight demand, or the imperatives of long-term railway planning?
Without such clarity, the rail’s market share doesn’t just shrink, it vanishes. And once lost, it rarely returns.
Like Britain before us, we now face the same symptoms of a broken policy model:
- A stagnating passenger network, with low-frequency services, ageing rolling stock, despite billions spent on track and station upgrades
- A freight sector in terminal decline – KTMB handles less than 3% of the peninsula’s cargo movements – a dismal figure in a logistics-driven economy. Surprisingly, a government policy paper acknowledged the need to shift freight movements from road to rail in a big way after the double-tracking project is completed.
- Governance gridlock, where the RAC, not KTMB has full control – all financial decision making, new investment and monetising railway land lies with the RAC, which KTMB claims is not to its benefit
- Knee-jerk decision-making, such as a sudden RM10.7m leasing deal on rolling stock
This is far from a structural reform that the rail sector badly needs, and nowhere close to a long-term strategic plan for the country. And by the way, where are the freight transformation plans?
Changing course
Having spent 30 years proving why the model does not work, Britain has reversed its course. By Mahathir’s standard of governance, we should follow suit.
After decades of fragmented service, failing franchises, ballooning subsidies and collapsing public trust, the British government is now renationalising key parts of its network and putting it back under Great British Railways.
Malaysia should do the same – not in a piecemeal way but with a clear policy reset.
The split of KTMB and the RAC has been the root cause of the railways losing its traffic to the road sector.
Due to their excessive growth, the roads and highways are now congested, have run out of capacity, and are plagued by frequent mishaps and accidents.
KTMB and the RAC must be merged, under a single, unified and publicly accountable entity – one that owns, operates and invests in the full rail system.
This is how modern rail systems in Germany, France, Japan and China work.
Until we fix this, Malaysia will remain stuck with:
- Financially fragile rail services
- Wasted national rail assets, constantly turned into real estate projects for profit, with no benefits to rail network, capacity and the travelling public
- A theoretical logistics infrastructure policy instead of one that is the backbone of the freight market
- An underutilised strategic transport asset instead of the No 1 mode for intercity passenger travel.
Act now
We don’t need another 30 years to reach the same conclusion the British have. We already know the outcome – we are living it. It’s time to stop defending a model that has clearly failed.
Mahathir’s rail privatisation clone has not delivered. In fact, it has held back Malaysia’s rail ambitions by about 30 years.
We urgently need a coherent, integrated and accountable rail strategy – one that puts national interest ahead of land development profits.
If the UK has learned from its mistake, so should we. I’m looking forward to the merger of KTMB and RAC into a new train set. Perhaps we can call it Malaysia Rail or MYRail. – Free Malaysia Today
Rosli Khan, a traffic planning consultant, has a masters in transport planning and a PhD in transport economics from Cranfield University in England.
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