KUALA LUMPUR (Dec 2): UEM Group Bhd has been nominated by the federal government to secure a controlling stake in CRRC Rolling Stock Center (Malaysia) Sdn Bhd (CRRC RSC), the company from which Malaysia plans to lease 62 new train sets.
“UEM, representing the Malaysian government, will try to secure 51% or possibly more than 51%. It has not been finalised yet. They are still only conducting due diligence at this stage,” Transport Ministry (MOT) secretary general Datuk Seri Jana Santhiran Muniayan told the Public Accounts Committee (PAC) during follow-up proceedings on Oct 29. The PAC is following up with MOT and Keretapi Tanah Melayu Bhd (KTM) on its August 2025 report recommendations for the planned RM10.7 billion lease of electric multiple unit trains from China.
This confirms a report by The Edge Malaysia in its Sept 1-7 edition, which quoted sources saying that the wholly government-owned company, under the sovereign wealth fund Khazanah Nasional Bhd, will take a controlling stake in CRRC RSC.
CRRC RSC, which operates an assembly plant in Batu Gajah, Perak, is currently 70% owned by China’s CRRC Zhuzhou Locomotive Co Ltd, with the remaining 30% held by CRRC (Hong Kong) Co Ltd.
Malaysia plans to lease the train sets over a 30-year period for KTM, the national railway operator. The leasing arrangement, which includes maintenance, repair, and overhaul, is intended to ensure that KTM has sufficient trains in service.
According to Jana, UEM’s nomination was formalised by MOT on June 25, following China’s proposal of CRRC Zhuzhou as its preferred partner in a letter dated April 29.
He noted that the government also proposed changes to the leasing model approved by the Cabinet on Aug 14, 2024, with the public-private partnership unit (UKAS) no longer participating in the procurement process.
Under the new proposal, only MOT, UEM Group, and China’s CRRC Zhuzhou will be involved, Jana said.
“UEM is currently in negotiations with CRRC, and MOT is not involved at this stage. Once they have finalised the matter, it will be submitted to MOT for review, and thereafter brought to the Cabinet for final approval,” he noted, adding that the formal agreement is anticipated to be signed in April 2026.
When queried on why UKAS was removed from the project, Jana reiterated that “it was entirely the decision of the Ministry of Finance”.
He also said that MOT has set majority ownership by a Malaysian company as a key criterion in the leasing plan’s statement of need. If this requirement is not met, the government will not sign the contract.
The PAC has called on MOT to ensure that the due diligence study is completed within the stipulated time frame, presented to senior management, and subsequently submitted for Cabinet approval.
The committee also supported the ministry’s firm stance on local company ownership of the controlling stake in CRRC RSC, noting that this measure is crucial to ensure strategic control, technology transfer, and long-term benefits for the local industry.
PAC further emphasised the importance of close monitoring to ensure that local capacity-building objectives are met and that local workforce participation is fully realised throughout the project’s implementation.
The committee also recommended that the decision on the currency to be used for the lease payments should take into account currency stability and a long-term risk fluctuation analysis.