This article first appeared in The Edge Malaysia Weekly on February 10, 2025 - February 16, 2025

A consortium comprising ERWAN Bhd and Lion Pacific Sdn Bhd (ERWAN–Lion Pacific) has proposed an RM8.04 billion autonomous rapid transit (ART) system for Johor Bahru, encompassing three lines with a total length of 53km, according to ERWAN Bhd founder and executive chairman Datuk Seri Erwan Tahir.

The proposal positions ERWAN–Lion Pacific as the third contender for the Johor Bahru rapid transit project.

In an article last month, “EPE Power-Lion Pacific among bidders for Johor Bahru LRT” (The Edge, Issue 1557, Jan 13, 2025), EPE Power Corp Bhd was named as the vehicle that Erwan was going to use to bid for the JB rapid transit project. While Erwan has confirmed it is bidding for the project, it will be doing so using ERWAN instead of EPE.

ERWAN is a diversified group with businesses in water treatment, flood mitigation engineering and construction, logging, mining, oil rig decommissioning, marine and offshore vessel chartering, as well as shipbuilding, maintenance and repair. Its executive chairman, Erwan, is also the independent, non-executive chairman of Hextar Global Bhd (KL:HEXTAR).

ERWAN-Lion Pacific joins two other consortia vying for the project: YTL Construction Sdn Bhd–SIPP Rail Sdn Bhd and Theta Edge Bhd (KL:THETA)–Nylex (M) Bhd (KL:NYLEX) consortium.

The Theta-Nylex consortium has proposed an RM8.75 billion medium-capacity light rail transit (LRT) system.

It is not known what kind of system is being proposed by YTL-SIPP, though they are said to be partnering with Mobilus Sdn Bhd, one of the parties developing the ART-based Kuching Urban Transit System (KUTS) in Sarawak.

ERWAN-Lion Pacific’s proposal for the JB ART envisions an operational capacity of 17,640 passengers per hour per direction (PPHPD) at four-minute intervals, using 56 four-car ART sets, each capable of carrying up to 392 passengers. The three lines it proposes are largely similar to the ones proposed by Theta-Nylex: an Iskandar Putri Line to the west of JB, a Tebrau Line to the east, and a Skudai Line to the north that extends all the way to Universiti Teknologi Malaysia (UTM).

All three lines will converge in the city centre and be linked to the JB–Singapore Rapid Transit System (RTS) in Bukit Chagar. The proposal includes 35 stations and two depots — one in UTM for the Skudai Line and another in Desa Jaya for the Tebrau Line.

ERWAN-Lion Pacific aims to complete the Skudai Line by December 2026, coinciding with the RTS’ operational launch, followed by the Tebrau Line in December 2027 and the Iskandar Puteri Line a year later.

Theta-Nylex targets early 2027 for the first 10km of its elevated LRT line, connecting the Customs, Immigration and Quarantine Complex at Bukit Chagar to Taman Tasek.

Erwan says the RM8.04 billion proposal covers civil infrastructure construction, including elevated viaducts, and system costs. ERWAN-Lion Pacific is partnering with CRRC Corp Ltd for the supply of ART.

CRRC’s ART model is the basis for the ART system used by Sarawak Metro for KUTS. The hydrogen-powered ART was recently trialled by Sarawak Metro in Kuching to show the people the viability of the system.

While KUTS will run on both ground roads and elevated tracks, JB’s rapid transit system is expected to be fully elevated. Therefore, whether the system proposed is an LRT or ART, the developer will still have to build elevated viaducts.

According to Erwan, the JB ART’s operational cost, including maintenance, is estimated at RM21.73 billion over 30 years. As a private finance initiative, the winning consortium will develop, operate and maintain the system. The government will pay an availability fee for its operation. ERWAN-Lion Pacific proposes an availability fee of RM100 per km of usage.

With a four-minute service interval and 18 hours of daily operation, the government’s maximum annual payment could reach RM1.045 billion, assuming full system completion, maximum ART coach deployment, and daily operation. 

However, this is a theoretical maximum. In reality, some coaches will be in depots for maintenance, reducing the availability fee. Furthermore, the four-minute interval won’t be consistent throughout the day.

Take the Kelana Jaya LRT line’s fluctuating frequency as an example. On Mondays to Fridays, it runs at three-minute intervals during peak hours (7am to 9am and 5pm to 7pm) and 12 minutes during non-peak hours. On Saturdays, Sundays and public holidays, it runs at seven- and 10-minute intervals. It shows that peak hours will likely have shorter intervals than off-peak times.

“[If awarded the contract] Our concession is 30 years. The lifespan of trains is around 15 years, to be replaced or rejuvenated. That creates one round of capital cost. So, the [availability fee] payment figure will drop to RM500 million after 15 years.

“If no changes [upgrading to the trains] are to be done, the payment will remain at RM1 billion. Whether the trains need to be changed or not is up to the authorities,” says Erwan.

ERWAN-Lion Pacific plans to fund 70% of the project (around RM5.3 billion) through debt financing via bank borrowings and/or sukuk. The rest, around RM2.74 billion, will come from equity investments by ERWAN-Lion Pacific.

The consortium is also seeking a RM1.68 billion grant from the government to kick-start the project. However, Erwan says the consortium has the ability to fund the project itself.

“ERWAN (the company) will have to inject equity money first [before the government can release the grant]. MoF (Ministry of Finance) will not provide the grant without us putting in equity of 20% of the project value,” says Erwan.

It is unclear at this point whether the availability payment would be reduced or offset against the RM1.68 billion grant, should the government approve it. However, a portion of the availability payments will be used to service the borrowings and/or sukuk.

Earlier last week, Johor exco for works, transport, infrastructure and communication Mohamad Fazli Mohamad Salleh told the Straits Times that Malaysia intends to invite the private sector to submit proposals for the JB rapid transit project within the next four months.

He was quoted as saying that a request for proposal would be issued in the second quarter of the year to assess the feasibility of both the LRT and ART systems.

Fazli, the state assemblyman for Bukit Pasir in the Pagoh parliamentary constituency, also said an LRT network could cost RM20 billion, while an ART system is estimated to cost RM7 billion.

The final cost will depend on how extensive the network is going to be, with an LRT system expected to be more expensive than an ART due to the track infrastructure and more complex communication and signalling systems.

LRT proponents argue that ART systems have a lower grade of automation (GoA) than LRT. ART systems typically achieve up to Level 3 in GoA, while LRT systems can reach up to Level 4, meaning fully automated operation without onboard staff.

Regardless of the chosen system, the JB metropolitan region needs a comprehensive public transport system by early 2027 to prevent traffic congestion as an estimated 10,000 PPHPD (passengers per hour per direction) converge at the Bukit Chagar RTS station to cross the Malaysia-Singapore border.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.