THE Railwaymen Union of Malaysia (RUM) wants the national rail company to explain its recent joint venture with a third party on the maintenance, repair and overhaul (MRO) services in the rail sector.

The union said the work can be done internally by Keretapi Tanah Melayu Bhd (KTMB) and questioned the need for a joint venture with Destini Bhd, which it alleges has no track record on rail maintenance nor the manpower.

Last month Destini Bhd entered into an agreement with KTMB to establish a joint venture (JV) company, ET Sdn Bhd (ETSB), to expand its capabilities in MRO services.

Under the deal, Destini will acquire a 70% stake in ETSB, an indirect wholly owned subsidiary of KTMB, through its 100%-owned subsidiary, Destini Rail Sdn Bhd.

KTMB holds the remaining 30% stake via its wholly owned subsidiary, KTMB Technics Sdn Bhd.

RUM president Razak Md Hassan told The Malaysian Insight that there could be elements of breach of trust, abuse of power, corruption committed by the KTMB board of directors on the JV.

“We also hope that KTMB and the Transport Ministry secretary-general can clarify this,” said Razak.

On Wednesday, RUM lodged a police report and had its statement taken at the Malaysian Anti-Corruption Commission over the JV.

RUM secretary-general R. Subramaniam alleges that there is a possibility of the Transport Ministry’s involvement in influencing the approval of the JV.

“We are questioning if there is any involvement by the Transport Ministry in the JV.

“If not, then it could only be KTMB superiors who are involved. So, we urge the Transport Ministry secretary-general to assist in the investigations.”

The union lodged the police and MACC complaints because it wants clarification on the 70%-30% equity sharing, said Subramaniam.

“Destini Bhd is not a financially sound company and their cash flow is in a weak state. They also have no expertise in terms of railway engineering.”

Neither does Destini Bhd have the expertise in terms of manpower capable of carrying out tasks involving KTMB engineering.

“The company does not have facilities, such as workshops, equipment, tracks and so on, to develop railway engineering products.

“Based on the track record, there is no domestic or foreign involvement or proof that Destini Bhd has ventured into the railway industry.”

As for KTMB, Subramaniam said RUM questioned its justification of the JV when the company has all the expertise.

“We at KTMB have expertise in the field of engineering and have even been in the railway industry for more than 130 years.

“We have all the capabilities and facilities… depots, workshops, equipment, tracks and so on, we have the expertise and manpower in the railway industry.”

He added that KTMB is owned by Finance Ministry Incorporated and should have no financial problems.

“The implementation of engineering works within KTMB is cheaper, profitable and even able to save costs compared to the JV.”

Subramaniam said the JV terms are unfair for KTMB.

“We feel that there are elements that can lead to long-term losses that will have implications for the employees and KTMB itself.

“We hope the authorities will look into this matter.”

KTMB has yet to respond to The Malaysian Insight queries on the matter.

It was reported that in 2016, Destini expanded its scope of services in the rail sector through the supply of 35 motor trolleys for KTMB. Prior to that, it was known in the heavy, defence and oil and gas industries.

The group has since then put in efforts to strengthen its position in the rail sector by widening its expertise and scope of services. – March 6, 2021.