KUALA LUMPUR: A RM1.7 billion two-pronged plan to set up the Perlis Inland Port and develop the national rail cargo business is expected to be tabled soon by the transport ministry.
The plan, to be implemented through an alliance between Asia Freight Rail Sdn Bhd (AFR) and Keretapi Tanah Melayu Bhd (KTMB), was recently presented to Transport Minister Datuk Seri Liow Tiong Lai.
According to sources close to the deal, the ministry is keen on seeing the plan take off as it would help develop the national rail cargo, which in 2015 accounted for only 6,206 tonnes or 2.2% of the 278 million tonnes of cargo transported nationwide.
Similarly, out of the 5.9 million TEUs (twenty-foot equivalent units) of containers handled in 2015, only 286,076 TEUs or 4.8% were transported by rail.
“The alliance endorsed by the ministry of transport will leverage existing national rail infrastructure and rationalise rolling stock requirements, develop new market segments and new businesses, and new marketing strategies inclusive of door-to-door service and logistics,” said a source.
The project aims to overcome rail bottlenecks by bypassing central Kuala Lumpur, capture trans-shipment opportunities, and increase types of goods carried via rail.
In future, it is expected to transport hazardous materials, refrigerated containers, bulk grains, consumable items, motor vehicles and parts, and steel products, apart from containers, sugar, chemical and cement.
In the north, AFR aims to facilitate cross-border land bridge transportation between Bangkok and Port Klang.
The 500-acre (202ha) inland port, to be located in Chuping Valley about 4.7km from Padang Besar, includes 375 acres of supporting industrial development catering to 64-acre clusters of marine, rubber and wood-based industries.
The port would feature a container yard that can store up to two million TEUs of containers, and a warehouse with reefer container facilities, yard checkpoints and clearing houses, and web-based port computer system links to seaports.
In addition, KTMB rolling stock would be increased by another 1,200 wagons and 50 locomotives from China at a cost of RM1.2 billion.
AFR director Datuk Lee Chee Hoe said the inland port is aimed at harnessing the lost business in cargo storage and transport by the first quarter of 2017.
“About 97% of cargo runs on haulage or road, including dangerous cargoes. Therefore, we want to recapture the cargo business. The expansion of the KTMB-owned Padang Besar inland dry port in Perlis is part of a RM850 million project earmarked under the 11th Malaysia Plan to capture the cargo from Thailand en route to Penang Port,” he told the media previously.
“We want to harness the cargo business where there are about 306,000 TEUs that do not make their way into Malaysia because of storage inadequacies. They remain stored in southern Thailand.
“So, we are in competition with Thailand,” he said, adding that the development in Chuping would help the growth of Perlis.
A designated highway from the border to the port, and a railway extension track would be built to connect to the double-track rail network, he said.
Lee said AFR would spend RM300 million to RM500 million to build the dry port.
AFR — whose shareholders are Beringin Waja Sdn Bhd (70%) and Alriz Associates Sdn Bhd (30%) — was set up in October last year as a special purpose vehicle, and the joint venture with KTMB is its maiden project.
Lee is also a director of Construction Zenith BUCG Sdn Bhd that is tasked to develop the RM6.3 billion integrated infrastructure project including the undersea tunnel, and Zenith Construction Sdn Bhd.
He said the Perlis project will leverage the expertise of China state-owned China Railway Construction Company Ltd (CRCC), which it was in partnership with for the infrastructure project in Penang.
He added that AFR would also be working with a Hong Kong-based logistics company to expedite the project.
Lee said the project would take between 18 and 24 months for the rolling stocks to arrive and the construction of the dry ports to complete. “We expect our return on investment to kick in in 13 years. We are rebuilding the cargo business,” he said.