Friday January 4, 2013
|New structure: (from left) Shahril; Prasarana group director, project development, Zulkifli Mohamed Yusoff; and group director, finance, Mohd Zahir Zahur Hussain at the briefing.|
KUALA LUMPUR: Syarikat Prasarana Negara Bhd has embarked on a massive restructuring plan that will see the country's biggest urban public transport asset owner and operator attain more financial sustainability, alleviate the heavy burden of its debt and have a better grip on its operations.
Group managing director Datuk Shahril Mokhtar said Prasarana had issued a total of about RM10bil of bonds and sukuk for the past decade and was paying about RM400mil in interest per year.
And the public transportation giant is expected to issue another RM6bil of sukuk in two equal tranches by February and another in the third quarter of this year to finance its two light rail transit (LRT) system extensions that cost about RM7bil and other infrastructure works in the pipeline.
It was highlighted in Auditor-General's Report 2011 that Rangkaian Pengangkutan Integrasi Deras Sdn Bhd or RapidKL, a unit of Prasarana that operates the rail and bus operations before the restructuring, had an accumulated total loss of RM293.8mil as at December 2010.
The new Prasarana structure with immediate effect includes the creation of four new entities Rapid Rail Sdn Bhd, Rapid Bus Sdn Bhd, Prasarana Integrated Management and Engineering Services Sdn Bhd (Prime) and Prasarana Integrated Development Sdn Bhd (Pride).
The move is part of Prasarana's five-year plan as underlined in its Go Forward Plan 2.0 (GFP 2.0) blueprint.
These entities will now operate the rail, bus, public transport consultancy services as well as property and commercial development for the group with their own separate accounts.
All the debts from the bonds are reflected at the holding company level.
“Basically, we do not have subsidy and we go to the market to finance our project development.
“But the question is where do we get the money to service the debt? Mostly it is from operations but we are working on this corporate restructuring to stay sustainable,” said Shahril after the unveiling of its new corporate structure yesterday.
Explaining the performance of its business units, Shahril said the rail operations that were profitable were cushioning the losses of the bus operations.
“But that is not sustainable and we are finding ways so that one day the bus operations will be sustainable on its own,” he said, adding that only 10% of the bus routes were profitable as part of its social commitments to provide public transport services.
[KVMRT: Why no extra efforts/plans to make bus routes to be profitable?]
Rail was making a yearly revenue of about RM240mil with earnings before interest, taxes, depreciation and amortisation (EBITDA) of RM50mil.
Meanwhile, the business operations have a yearly revenue of about RM180mil but the operational cost was at a staggering RM280mil and that reflected a loss of RM100mil.
Shahril said with a separate profit and loss accounts now, Prasarana could show to the Government how each business unit, especially the bus and rail, was performing.
“Nevertheless, to be fair to the bus operations (Rapid Bus), the rail division (Rapid Rail) has to pay a fee to Rapid Bus for the feeder buses it uses.
“The restructuring exercise would also allow Prasarana to make decisions faster than before, thus giving it a greater freedom to further improve its level of services to the stakeholders,” he said.
For the bus and rail services, Shahril said Prasarana also planned to expand apart from the Klang Valley, Penang and Kuantan to Ipoh, Seremban, Kuching and Kota Kinabalu.
[KVMRT: Rapid Kuantan has been launced while Rapid Seremban is next in the pipeline, a major relieve for public transport users in Seremban.]
Shahril said to further aid the group's financial sustainability, Prasarana was also going big on property and commercial development.
“There is only a few public transport companies in the world that are actually profitable.
“One of them is Hong Kong's MTR Corp where more than 60% of its income is from commercial and property development and we are going to do just that,” he said.
Shahril said Prasarana was also keen to list its rail business on the stock market post-2018 when the current Sungai Buloh-Kajang mass rapid transit (MRT) system was completed.
“It is because the whole MRT project is fully funded by the Government, thus operationally, it will make money,” he said.
For Prime, Shahril said Prasarana would make good use of its vast expertise in infrastructure development to provide consultancy services locally and abroad.
“Ultimately, we want to increase our non-fare business to contribute at least 20% of our revenue by 2017 from 8% now,” he said.