Loke: “Pay-As-Use” Leasing Will Reshape Freight Transport

Transport Minister YB Anthony Loke recently launched the "Pay-As-Use" locomotive and wagon leasing plan which is meant to further strengthen Malaysia’s freight rail sector.

This plan involves the collaboration between industry players and financial institutions to reducing reliance on public funds.

This initiative adds-on to an existing agreement between Railway Asset Corporation (RAC), SMH Rail, and Malayan Railway Limited (KTMB) in 2024. The goal - to make rail transport more competitive and sustainable while cutting costs for operators.

Rail remains a crucial part of the logistics network, offering efficiency, cost savings, and safety. It also supports Malaysia’s commitment to net-zero carbon emissions by 2050. In 2024, KTMB transported six million tonnes of cargo - 15% increase from the previous year.

With economic recovery and growing trade, this figure is expected to rise by 10% annually.

Loke further added that SMH Rail has shown its expertise in locomotive and wagon manufacturing. Under this initiative, 44 RAC owned locomotives will be refurbished and six new ones leased to KTMB.

Additionally, a further 450 wagons will be added, creating more opportunities for local vendors handling maintenance and repairs.

The completion of Klang Valley Double Track (KVDT) 1 and 2, along with the reopening of the Pasir Gudang Line, is expected to boost freight demand.

According to him further, the government will continue supporting leasing programs so operators can access quality assets without heavy financial outlay. Increasing freight services will also help maximize track usage - currently utilisation level stands at just 30%.

To add on further, freight trains offer a greener, more efficient alternative to trucks. A single train with 40 wagons is equivalent to 80 trucks. This in turn reducing road congestion and cuts emissions by 50g/km per tonne of cargo.

The minister also hopes with stronger public-private collaboration, the country is able to move toward a more modern, efficient, and sustainable rail industry, in line with the National Transport Policy 2030.