This article first appeared in The Edge Malaysia Weekly on March 24, 2025 - March 30, 2025

COMPETITION for the contract to develop and operate the Johor Bahru (JB) elevated autonomous rapid transit (e-ART) is set to heighten as another consortium is said to be throwing its hat into the ring.

SMH Rail Sdn Bhd, a producer of train locomotives in Malaysia, is believed to have partnered Dhaya Maju Infrastructure (Asia) Sdn Bhd (DMIA) and Pestec International Bhd (KL:PESTEC) to bid for the project.

“Yes, it is a consortium of SMH Rail-DMIA-Pestec. That’s what I heard,” says a source who is involved in the bidding for the project. Another source whom The Edge spoke to says he will not be surprised if SMH Rail puts in a bid.

However, others are sceptical, pointing out that SMH Rail is not an infrastructure developer, but a rolling stock manufacturer and maintenance company.

SMH Rail is currently busy refurbishing and upgrading 44 locomotives and 246 wagons owned by Railway Assets Corporation (RAC) that will be leased back to Keretapi Tanah Melayu Bhd (KTMB) for 25 years.

A senior officer of SMH Rail, when contacted by The Edge, says he is not aware of any plan to bid for the JB e-ART. Meanwhile, Datuk Seri Dr Subramaniam Pillai, group executive director of DMIA, says it is premature to discuss a possible bid.

Pestec group CEO Paul Lim Pay Chuan had not responded to a request for comment by press time.

While the parties that supposedly make up the consortium are keeping mum about whether they are bidding for the estimated RM8 billion project, their competitors seem quite sure that they are. Nevertheless, there are no details yet on what kind of system SMH Rail and its partners have proposed for the project.

Prior to this latest development, three consortiums were known to have submitted proposals for the JB e-ART project. The consortiums comprise LBS Bina Group Bhd (KL:LBS), Nylex (M) Bhd and Theta Edge Bhd (KL:THETA); YTL Corp Bhd (KL:YTL) and SIPP Rail Sdn Bhd; and Erwan Bhd and Lion Pacific Sdn Bhd.

The LBS, Nylex and Theta consortium was the first to submit a proposal. It proposed an 11.3km light rail transit (LRT) system for JB that would run between the Bukit Chagar station — where it would interchange with the JB-Singapore Rapid Transit System (RTS) Link — and Taman Tasek.

It is worth noting that while LBS-Nylex-Theta proposed an LRT system, the Public Private Partnership Unit (UKAS) of the Prime Minister’s Department had issued a request for proposal (RFP) for an e-ART system in Iskandar Malaysia.

According to the RFP, the participating companies are required to have a minimum paid-up capital of RM400,000, a minimum net worth of RM500 million and five years of cumulative earnings before interest, taxes, depreciation and amortisation (Ebitda).

The companies must also have completed one contract with a minimum value of RM500 million in the last 10 years in the construction and transport industry. Apart from that, they must have available credit facilities of not less than RM750 million.

UKAS held a briefing session on March 20, during which it revealed that there were two corridors to be developed — the North and East corridors. The North Corridor is to be developed over two phases, from the Bukit Chagar RTS to Universiti Teknologi Malaysia (UTM) in Skudai, and from UTM to Senai Airport.

The North Corridor could see 17 stations being built, including four interchange stations at Bukit Chagar (for the RTS and the East Corridor), Larkin Sentral (bus terminal), Taman Tasek and Taman Senai Utama (KTM Electric Train Service).

Meanwhile, the East Corridor is from the Bukit Chagar RTS to Bandar Tiram in the northeast of JB. This corridor could have 15 stations, including three interchange stations such as those at the Bukit Chagar RTS and Pasir Gudang.

The RFP requires a Level 3 Grade of Automation (automated but monitored) for the e-ART system. It also requires the North Corridor e-ART to have the capacity to carry 14,000 passengers per hour per direction (pphpd) and the East Corridor to carry 16,000 pphpd.

SMH Rail’s expertise is in manufacturing, maintenance, refurbishment and upgrading of rolling stock.

In October 2012, SMH Rail — as part of a consortium with Siemens Malaysia and Siemens AG — secured a contract to supply 58 driverless four-car train sets for the Sungai Buloh-Kajang Line (MRT Line 1) project.

SMH Rail’s train assembly plant in Rasa, Hulu Selangor — Malaysia’s first MRT train assembly plant — was the assembly plant for the Sungai Buloh-Serdang-Putrajaya (SSP) Line (MRT Line 2).

SMH Rail’s expertise in rolling stock should come in handy should it bid for the JB e-ART project. Its supposed partners DMIA and Pestec are involved in rail infrastructure developments.

DMIA, through Syarikat Dhaya Maju LTAT Sdn Bhd, is the developer of the Klang Valley Electrified Double Track (KVDT). The first phase of the project, from Rawang to Salak Selatan, was completed in April last year.

DMIA is now developing the second phase of the project, valued at about RM4.47 billion. Earlier, the contract was expected to be completed in April 2025, although this seems to be a tall order as the group only started the project in April last year.

DMIA is the controlling shareholder of Pestec. This came about after it subscribed for 1.33 billion shares in the latter for RM160 million, or 12 sen apiece. The restricted issuance was approved by Pestec’s shareholders at an extraordinary general meeting on Dec 10, 2024. 

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