THE ageing Rapid Bus fleet is costing the government, the auditor-general said in his latest report.

According to the report, about 62% of the Rapid Bus fleet is more than eight years old, and this has led to higher maintenance cost due to frequent breakdowns and costly spare parts.

The Auditor-General’s Report 2019 Series 2 also found that bus fares have not been reviewed in more than 10 years, which resulted in lower earnings.

Rapid Bus Sdn Bhd is owned by Prasarana Malaysia Bhd, which is in turn owned by Minister of Finance Incorporated.

The report noted that a 13-year-old Mercedes MBM bus had to be serviced 360 times at a cost of RM196,987.

Maintenance and repair costs rose to RM38.7 million in 2019 from RM9.64 million in 2018.

The cost of repairs conducted by external service providers also swelled from RM13,915 in 2018 to RM80,095 in 2019 and eventually to RM130,019 in 2020.

The report also found that 13 spare parts worth RM1.54 million became old, while 12 worth RM281,583 were no longer functional.

Spare parts cost also increased from RM46.8 million in 2018 to RM57.3 million in 2019 and subsequently to RM62.2 million in 2020.

According to the report, operational costs for the company between 2017 and 2020 came to RM1.71 billion compared to its net earnings of RM827 million.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) for the period under review was RM882 million, which is about 48.4% of expenditure.

The company said in response to the findings that the older buses and spare parts costs had contributed to the increase in maintenance costs.

The servicing for 300 MRT feeder buses were only conducted in 2019 once the warranty expired in earlier in the year.

“Besides that, Rapid Bus has also conducted initiatives such as using alternative spare parts and repairing broken components,” it said.

The company said it has recognised RM11.2 million in savings in 2021.

Rapid Bus said previously spare parts were procured in bulk from China, but the items could no longer be used as it has removed the Chinese manufactured buses from its fleet.

However, for 2021 spare parts replacements procurement will be planned according to utilisation through the material resource planning system.

The audit also found that the Rapid Kuantan and Rapid Kamunting city transit bus services continued even after the service agreements expired on December 1, 2018, and March 4, 2019, respectively.

These agreements involved Prasarana, the then Land Public Transport Commission now known as the Land Public Transport Agency and the Northern Corridor Implementation Authority.

No agreement was established for the Rapid Manjung bus service although the service went on from March 1, 2018, until it was terminated on November 1, 2020.

Based on a draft agreement, the contract cost for the three-year service was supposed to be RM9 million.

Rapid Kuantan also found itself in a bind as it had difficulties in claiming the RM36.6 million interim stage bus support fund grant from Apad for the service rendered in 2019.

The matter has been brought to the attention of the Finance Ministry for further considerations.

Among the recommendations proposed by the auditor-general were reviews on bus fares and the Rapid Kamunting and Rapid Kuantan bus services, ensuring that agreements are signed and are in effect before services are provided, proper procurement planning to avoid wastage and improving corporate governance. – September 28, 2021.