This article first appeared in The Edge Malaysia Weekly on March 2, 2026 - March 8, 2026

FEW would contend that public transport should be run purely to maximise profit. Yet, as Prasarana Malaysia Bhd continues to operate at a huge deficit every year, scrutiny from the public and policymakers has intensified.

Is the problem stagnant fares or an underutilised network of rail lines, buses and demand-responsive transit (DRT) services across the Klang Valley?

For Prasarana president and group CEO Amir Hamdan, the solution lies in getting more people to ride its network of rail and bus services. More people on trains and buses would spread the burden of high fixed costs and narrow the deficit. But first, he says, reliability must improve.

“[The deficit] will definitely grow, because our cost is increasing,” says Amir in an exclusive interview with The Edge on Feb 24. Appointed to helm Prasarana in August last year, he has inherited a system under financial strain.

Wholly owned by the Minister of Finance Inc, Prasarana is the holding company of Rapid Rail Sdn Bhd, which operates six rapid transit lines in the Klang Valley. On Jan 21, Transport Minister Anthony Loke told parliament that Rapid Rail recorded a RM603 million deficit in 2025.

The company’s operating costs totalled RM1.324 billion, while unaudited revenue reached RM721.5 million — RM695.2 million from fares and RM26.8 million from non-fare sources. The My50 Unlimited Travel Pass accounted for RM234 million of Rapid Rail’s revenue in 2025, accounting for one-third of the company’s total revenue for the year.

To plug the shortfall between revenue and operating costs, Loke reportedly said Prasarana injected RM700 million in capital into Rapid Rail in 2025.

To be clear, this is not the first year that Prasarana has run at a deficit. As at Dec 31, 2024, Prasarana’s accumulated losses stood at RM55.32 billion, up from RM46.88 billion as at Dec 31, 2020, according to Companies Commission of Malaysia filings.

The company posted a net loss of RM1.54 billion in 2024, more than double the previous year’s RM412.48 million net loss, though still below the RM4.5 billion net loss recorded at the height of the Covid-19 pandemic in 2020.

Despite the losses, the company’s revenue has continued to grow. Revenue jumped 29.3% to RM839.56 million in 2024, from RM649.4 million in the previous year. Except for 2021, when its revenue fell from the preceding year, Prasarana’s top line has been growing over the five-year period to 2024.

Top-line growth has still been insufficient, however, to cover Prasarana’s operating costs, causing the company to register consecutive losses and accumulate a significant financial burden on the government.

Amir argues that the mismatch is structural. Fares have not been raised since 2015, even as maintenance and repair costs climb.

“We are trying to optimise costs and take measures to ensure we don’t spend recklessly. At the same time, our fares have remained unchanged for the past 11 years,” he says.

One of Prasarana’s efforts to minimise operating costs is shifting its procurement of spare parts from original equipment manufacturers (OEMs) to original parts manufacturers (OPMs). Some OEMs have agreed to the approach, he notes.

“For example, most of Rapid Rail’s parts come from overseas OEMs, as we don’t have them locally.

“So, on the procurement side, we are now trying to move away from OEMs and source directly from OPMs. This allows us to have a direct supply, shorter lead times and better pricing, as there is no OEM markup.”

Reducing Prasarana’s deficits is not just a matter of cost management, given its substantial fixed costs. To achieve sustainability, the company must increase ridership, spreading fixed costs over more passengers and thereby reducing its deficits.

Reliability of Prasarana’s network, Amir insists, is key to getting more people to use its services. The improvement in reliability of Prasarana’s services over the past five years has contributed to rising ridership, he notes.

Monthly ridership has climbed steadily as services improved, rising from a pandemic-era high of 14.47 million in April 2021 to 22.6 million in December 2022, and surpassing 30 million in December 2023.

The completion of the Mass Rapid Transit (MRT) Putrajaya Line in March 2023 boosted usage further, with monthly ridership across Prasarana’s network in the Klang Valley, Penang and Kuantan reaching 35.5 million in December 2024. In July last year, 38.3 million passengers used the network — the highest monthly figure in five years.

One way the government has committed to improving public transport services is by ensuring that Prasarana maintains a fleet of buses and vans in top condition to serve the public.

To do this, the government has allocated RM1.9 billion in 2025 to replace and expand Prasarana’s fleet of buses and vans, strengthening first- and last-mile connectivity in the Klang Valley and Penang.

The funding covers 1,660 new buses, comprising 310 diesel and 1,350 electric, to replace ageing vehicles. All diesel units have been delivered.

The number of breakdowns has fallen, and ridership on certain routes has ticked up accordingly, Amir says.

“So, as the frequency of breakdowns falls, reliability improves and we see ridership rise on certain routes because the public knows the buses are becoming more reliable,” he explains.

Still, challenges remain. Amir points out that three-quarters of the bus fleet is more than a decade old.

“We won’t be able to meet overall first- and last-mile needs until we expand our fleet. I believe the government understands that, which is why it approved the additional 300 electric vehicle (EV) vans first,” he says.

The EV vans are going to be used for RapidKL On-Demand, the DRT service, to enhance last-mile connectivity.

The fleet management system of Rapid buses is also being upgraded so that real-time tracking of the fleet can be done more accurately, allowing passengers to better plan their journeys, says Amir. This in turn will also improve the reliability of the system, he adds.

Amir maintains, however, that a fare escalation formula will ultimately be necessary to keep pace with costs. But this is not something that the government wants to proceed with at this stage, he says.

This is understandable. Increasing public transport fares can be a tough proposition in a country where services are frequently disrupted.

Amir points out that even Singapore’s public transport system is not immune to disruption. In September 2025, a string of rail disruptions occurred on Singapore MRT’s network, involving four services on the republic’s North-South Line, East-West Line, Thomson-East Coast Line and the SBS Transit-operated Punggol LRT in a span of five days.

Singapore’s acting Minister for Transport Jeffrey Siow said expecting zero disruptions on the republic’s rail public transport is unrealistic, noting that, just as phones and computers need to be restarted occasionally, so do the trains. 

“Our current fare is very cheap; it is not reasonable,” Amir says. “The only cities that see fewer than one or two disruptions a year are Taipei and Beijing, because they have so many trains and plenty of spares ready.”

He adds that the system is already among the top 10 globally, while fares remain the cheapest in the world. “I understand that we should not have a steep increase in fares, but I believe a gradual rise of, say, 10 sen per year would be fair and help narrow the funding gap.”

Subsidy design also matters. Prasarana has to absorb the excess subsidy for the My50 ridership, as the number of unlimited-pass users exceeded the budget allocated by the government.

In 2025, the government allocated RM200 million for the My50 programme without any cap, meaning that even after the budget is fully used, additional riders can still subscribe. Demand exceeded expectations, creating an RM84 million shortfall that Prasarana absorbed in 2025, says Amir.

When the unlimited travel passes My50 and My100 were introduced in 2018, Prasarana operated two LRT lines, one MRT line, the KL Monorail and Rapid buses in the Klang Valley, Penang and Kuantan.

The My100 pass originally allowed passengers to access all Prasarana services, whereas the My50 pass was limited to the bus system, excluding the Sunway Bus Rapid Transit (BRT). At that time, there was only one MRT line.

In January 2022, the programme was reorganised into a single My50 pass, offering unlimited travel on all Prasarana-operated services except the DRT. Prasarana now also operates the MRT Putrajaya Line, completed in March 2023.

With the upcoming completion of the Shah Alam LRT line, Amir suggests revisiting the concession structure to reflect the higher costs of running a larger network, potentially reintroducing the My100 pass once the Shah Alam Line is fully operational.

“Ultimately, we’re looking at whether, once the Shah Alam Line is completed, we can reintroduce the My100 pass as it was in 2019 when the programme began,” he says. “With the network expanding, we should also consider increasing the price of the unlimited pass. There has been discussion on this, but we want to ensure our performance, reliability and train availability are stable first.”

Just last week, Loke directed Prasarana to submit an immediate recovery action plan, following a series of disruptions on the LRT Kelana Jaya Line recently. On Friday, Prasarana outlined a strategy to stabilise its ageing Bombardier 818 Series train sets, including the early procurement of additional spare parts.

With accumulated losses continuing to mount, more fundamental questions arise over how Malaysia funds public transport, especially as the government aims for a 40% public transport modal share by 2030.

Reducing car dependency in the Klang Valley will require a radical shift in how transportation is perceived. Without broader changes in policy and public attitudes, Prasarana’s deficits are likely to continue to grow.

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