Malaysian Industry-Government Group for High Technology

Malaysian Rail Industry

A SNAPSHOT

FUTURE RAIL 2030

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Introduction

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Right Climate for Rail? - Global

Global megatrends indicate rail will be a solution to future mobility

Climate Change
Greener choice of transportation
Co2 emission per pax1.
24.3

Urbanization & population growth

Urbanization increase with population
World Population2
9.0

Congestion
Wastage of time & energy
No. of people transported per hour in urban environment3
50,000 22,000 2,100 9,000 Tram

Oil Scarcity & Price of Energy

Volatility of price & increase consumption
World Energy Consumption4 (quadrillion btu)
Non-OECD OECD

770 573 671

kg/100km

Billion

8.0 6.0

7.0

505

2.5
Airplane Hybrid Car
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2.2 Train 1999 2011 2027 2046

Car

Bus

Metro

2008

2015

2025

2035

1 - most eco mean of travel, Doritix

2 worldometers.info

3 UN Department of Economic & Social

4 US Energy Info. Admin.

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Right Climate for Rail? - Local

Rail is one of important elements in national development agenda

ETP
Greater Kuala Lumpur/ Klang Valley
Connecting to Singapore via a high speed rail system Building an integrated urban mass rapid transit system
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GTP
Improving Urban Public Transport
Improve vehicle availability

10th Malaysia Plan (2011 2015)

Industrial Master Plan 3 National Industrial Development Plan

Facilitating overall logistics development as well as developing rail freight service.

Improve reliability & journey times

Improve accessibility & connectivity Regulatory restructuring

RM2.8bil is allocated for improving urban public transport in the first two years of the 10th Malaysia Plan.

Other Initiatives
Green Technology Policy States Development Initiatives
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Future Plan Rail Investment

Leverage on rail investments that in the pipeline until 2030 and beyond
Line Extension Projects Integrated Transport Terminal (ITT)
Subang Jaya, Penang LCCT, Sepang Senai Airport

Pre 2020
Batu Caves/ Rawang/ Seremban/ Klang- KL Sentral KTMB Line Freight Relief Line KTMB Feeders

Putrajaya/KL Monorail Pre 2030

LRT (Kelana Jaya
Klang) Outer Orbital Line

2013

2014

2015

2016

2017

2018

2019

2020

2030

Electrified Double Tracking Project

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MRT1 Integrated Urban Mass Rapid Transit Systems 1

High Speed Rail Systems

MRT2/MRT3 Swak Railway Track (Similajau Tanjung Manis)

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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, Manufacturing & Assembly

Systems Integration Rail Training

Other Services
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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 Capabilities Key Focus Areas
Consolidation of industry players
Market Opportunities

Human Capital Requirements Potential quick-wins Supply & Value Chain Enhancement Roles of Stakeholders
Effective Implementation
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Where are we now?

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Malaysia Rail Industry In Brief

RM Billion

Rail related activities has been more than 100 years with investment more than RM 100 billion since 1990s
RM Billion 40.0 30.0 20.0 10.0 4.0 3.0 2.0 1.0 1990
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Rail Industry Turnover 2010

25.5 25.9

7.26
3.5*

KV/MRT
Shipbuilding & Shiprepair

Rail

Automotive

Aerospace

Double Tracking

KL LRT Expansion/ Upgrading Johor Double Tracking

Total Employment = 9,000 workers*

Source: MIGHT 6,000

Passenger VS Freight

PUTRA (LRT) STAR (LRT) EMU (Commuter) KTMB R-S 1995 2000

ERL KTMB R-S Monorail Sabah Railway Commuter Rehab Modernization 2005 2010

5,000 4,000 3,000 2,000 1,000 0 Railway Passenger ('000)

Cargo Handled ('000 tonnes)

* Estimated figure (working-in-progress)

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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, Manufacturing & Assembly

Systems Integration Rail Training

Other Services
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Regulatory & Policy Making Group

Rail industry involves cross-ministerial and intervention from various Governments related organisations
Agency
1 2 3 4 5

Areas of Responsibility
Ministry responsible for putting modern, efficient and safe rail transport system to facilitate Malaysias economy. Responsible for issuance of licences, regulates and enforces all matters relating to rail transport activities within land public transport system Federal Statutory Body under MoT established to manage of all railway assets and liabilities, financing and execute the development and redevelop the railway infrastructures. Responsible for formulating policies & strategies for development of transport & logistics sector. Responsible for export promotion in promoting Malaysian products which includes transport equipment. Responsible for preparation of Malaysian Standard for railway engineering and construction materials.
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MOT SPAD RAC MITI

MATRADE SIRIM

6
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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 A government linked company GLC implementing Malaysia first integrated mass rapid transit railway

92 units (1983, 87, 90, 92, 2003, 2005)

Locomotive

219 coaches 58 units (1994 & 1997)

Wholly-owned Gov. company Facilitates, undertakes and expedites public infrastructure projects

12 units of EMUs
ERL

Commuter

Subsidiary & main operating arm of Prasarana

5 units (2009)
ETS

Sabah State Railways A railway system and operator in the state of Sabah
Melaka Tram

Cargo Wagon
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3189 units Container flat, domestic, bulk cement, flat low

Putra LRT

Star LRT

Monorail

35 sets each 2 & 4 car trains

30 sets of 6 car trains

12 sets of 2 car trains

20 units of 2 car trams

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Rail Operation Group

Local operators provide its services in all segments of rail transportation
Rail Transportation Segments
Intercity Suburban/ Regional High-speed Light Rail Subway/ Commuter Cargo

Operators

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Design, Manufacturing & Assembly

Sub-Sector Turnover
601.3

RM Million

503.9

519.6

Tier 1: Final integrator complete train Locomotive EMUs/DMUs Coaches Wagon Cargo Tier 2: Major systems & sub-systems integrators Electrical & Electronics Systems Body & Interior Mechatronics Systems Electrification Tier 3: Components/Parts Manufacturers for Rolling Stocks Signaling & Comm. Tracks Works Electrification
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2008

2009

2010

Employment Technical & Non-Technical Workers

Technical Operation
330 335 340
339 349

345

350

Capabilities Status
32%

45%

None Partial Full

23%

Source: MIGHT
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Maintenance, Repair & Overhaul (MRO)

Rail Assets
RM Million

Sub-Sector Turnover
600.7 480 406.15

MRO Segments
1st & 2nd Level Maintenance

Rolling-Stocks

Signaling & Comm.

Tracks & Infra.

2008

2009

2010

3rd Level Maintenance

Component Maintenance Propulsion Maintenance

Employment Technical & Non-Technical Workers

Technical Operation 426 495

350

400
2%

450

500

550

Capabilities Status
28%

None Partial

Modification/ Upgrade
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70%

Full Source: MIGHT

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Systems Integration
Sub-Sector Turnover
Signalling
RM Million
6.6

1.13

0.5

2008

2009

2010

Employment Technical & Non-Technical Workers

Communication
Operation
Technical
0
70 144

100

200

Capabilities Status
25% 15% Full Partial None 60%

Source: MIGHT
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Human Resource Development Group

Type of Human Capital Internal Training
Railway Operation Track Maintenance Product Development Design Engineer System Analyst Fabricators Process Engineer Software Engineer Testing Engineer Maintenance Technician Mechanics Metallurgist Management & Leadership Signalling & Communication

Rail Industry

Design & Engineering

System Analyst Power Engineer E&E Engineer Material Engineer Chemical Engineer

Operation

General Skills & Technical

Precision Technician NDT Inspectors Welder

MRO

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 Human Resource

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Ministry of Higher Education

Malaysian Qualification Agency

SIRIM

MITRANS

Jabatan Tenaga Manusia

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Current Issues & Challenges

Lack of Inter-modal and seamless connectivity Passenger & Freight sharing tracks Hassle with custom clearance Reserve land for rail Unclear policy support Lack of dedicated rail incentive No industry champion spearhead sub-sector development Noise & environment issues Entry of short-term players
UNCLEAR POLICY & INSTITUTIONAL FRAMEWORK INSUFFICIENT RAIL INFRASTRUCTURE LACK OF COMMONALITY

High life-cycle support cost

No common standard & certification Meter gauge to standard gauge In-house instead of outsourcing Lack of product support shorten life cycle Low product localization Short-term project

Trade Imbalance
(Large gap import & export)

Foreign control
HIGH DEPENDENCY ON FOREIGN SUPPLIER

Test spec. & parameter not provided by OEMs Certification by OEMs Poaching & Migration

Lack of regulatory enforcement Absent of coordinating body

Lack system integration capabilities

SHORTAGE OF SKILLED / KNOWLEDGE WORKFORCE

In-house training provider Multi-disciplinary skills & knowledge

Poor procurement process

Lack of investment in R&D Predictive maintenance in addition to conditioned monitoring capability Lack of certified testing facilities
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LACK OF CAPABILITIES TO SUPPORT PRODUCT LIFE CYCLE

Lack of design & full SCADA capability

2 years gap for new graduate Retirement No dedicated rail course at local universities No career prospect towards specialist

Limited capabilities in MRO e.g. Level 3 Lack of track records Lack of specialized skilled workforce Unattractive relatively with other sectors

Lack analysis skill in predictive maintenance

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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 Produced by: JTS Hungary, Austria

Year: 1997 Produced by: UCW South Africa

Year: 1997 Produced by: ROTEM, Korea

Year: 2009 Produced by: ROTEM, Korea

Year: 2012 Produced by: 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
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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.
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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.
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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.
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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.
Gauge Types Standard gauge Metre gauge Narrow gauge Total Route KM 534,686 72,880 5,903 % world total 58.3 % 7.9 % 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).
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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
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Thank You
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