KLIA Express ERL Fare Hike Effective 1 January 2016

[KK Lee 5]

 

Apple & oranges.

Apple or oranges, same farmer.

[KK Lee 5]

Grabcar charge rm65 from kul to kl city center or vv. Wonder how much grabcar is impacting Erl pax number?

[jani 0]

I think not yet significant, but surely will be pretty soon.

[flee 5]

Grabcar charge rm65 from kul to kl city center or vv. Wonder how much grabcar is impacting Erl pax number?

ERL is still cheaper if one pax is travelling to Sentral. But if you need to take another mode of transport to your final destination, the cost will escalate whereas Grabcar will get you to your final destination from the airport.

 

I have not used ERL this year and I tried the Grabcar RM65 (plus tolls) option. Its pretty efficient and they pick you up within 2 or 3 mins of you placing the order.

[Mr.Bandit 0]

The brand new KLIA Transit Train revealed yesterday. There will be a total of six new trains; two assigned for KLIA Ekspres and four assigned to KLIA Transit.

 

[Waiping 12]

Probably not the right time to replace as this usually means higher charge for the consumer, no? I thought the KLIA Express and KLIA transit trains are rather reliable.

[jani 0]

Probably not the right time to replace as this usually means higher charge for the consumer, no? I thought the KLIA Express and KLIA transit trains are rather reliable.

Well they already increased it beforehand.. I guess

[S V Choong 4]

Nice, who is the manufacturer of this new train? What will they do with the existing trains? Refurbish them or take them out of service?

 

The airport express trains in HK are apparently older but still kept in pristine condition. I don't know why couldn't do the same with the KLIA express!

Edited October 21, 2016 by S V Choong

[flee 5]

Nice, who is the manufacturer of this new train? What will they do with the existing trains? Refurbish them or take them out of service?

 

The airport express trains in HK are apparently older but still kept in pristine condition. I don't know why couldn't do the same with the KLIA express!

The new trains are manufactured by China-based Changchun Railway Vehicles Co Ltd (CRRC).

 

The current fleet is being refurbished with new interiors too - announcements have been made some time ago, I believe when they opened the klia2 station. So these new trains will mean a higher frequency service to KLIA and klia2.

[nastar 0]

The current train, manufactured by Siemens Desiro ET 425M, have a life span of 30 years:

Current train registration:

X1-01 to X1-08 designated to Ekspres train.

T1-01 to T1-04 designated to Transit train

 

Current frequency:

Ekspres:

Every 15 minutes – peak hours: Sun to Fri 06:00-09:00 hrs, 16:00-22:00 hrs
Every 20 minutes – off-peak hours: Sun to Fri 05:00-06:00 hrs, 09:00-16:00 hrs, 22:00-00:00 hrs, Sat all day

Every 30 minutes – after midnight

 

Transit:

Every 20 minutes – peak hours: Mon to Fri 07:00-09:00 hrs, 17:00-19:00 hrs
Every 30 minutes – off-peak hours: Other than the above days/time

 

The additional train, manufactured by CRRC Changchun Railway Vehicles Company Limited:

New train registration:

X2-09 to X2-10 designated to Ekspres train (2sets). First train arriving in March17

X2-05 to X2-08 designated to Transit train (4sets). First train arrived 19Sep16, scheduled into service Mar17.

 

The new train manufactured is totally new train model, built from scratch as CRRC has to follow the current train model operated by ERL.

 

For Ekspres, with 2 additional train, frequencies remain unchanged, which will give more space for train maintenance.

For Transit, with 4 additional train,frequencies will be increased to every 15 minutes during peak hours & 20 minutes during non-peak hours.

 

Additional train is crucial as current schedules are very tight. At least one train is scheduled for maintenance and one for standby.

Edited October 24, 2016 by nastar

[nastar 0]

The additional train, manufactured by CRRC Changchun Railway Vehicles Company Limited:

New train registration:

X2-09 to X2-10 designated to Ekspres train (2sets). First train arriving in March17

X2-05 to X2-08 designated to Transit train (4sets). First train arrived 19Sep16, scheduled into service Mar17.

Transit train registration should be:

T2-05 to T2-08 designated to Transit train (4sets). First train arrived 19Sep16, scheduled into service Mar17.

[KK Lee 5]

AFTER operating for almost 15 years and now enjoying record-high passenger volumes, many would ­expect that KLIA Ekspres to be a commercially viable project that can stand on its own.

Unfortunately, that does not ­appear to be the case. Express Rail Link Sdn Bhd, KLIA Ekspres’ operator, is actually under financial stress and is looking for a way out.

Along with a 30-year extension that ERL is seeking from the government in lieu of RM2.9 billion in compensation owed to it, the company is also said to be restructuring about RM2.8 billion in debts owed to Bank Pembangunan Malaysia Bhd (BPMB).

Furthermore, sources tell The Edge ERL is seeking higher collection from the passenger service charge (PSC). Currently, ERL collects RM5 and RM1 from outbound international and domestic passengers respectively.

PSC collected from passengers in KLIA and klia 2 is shared between Malaysia Airports Holdings Bhd and the government based on a formula. ERL gets a share of the portion that the government receives.

In short, the extension of concession alone might not be enough for ERL to turn profitable. It will also need to defer the bulk of its debt payments while boosting its non-fare PSC income.

Note that YTL Corp Bhd owns a 45% stake in ERL and Lembaga Tabung Haji, 36%. SIPP Rail Sdn Bhd, which is linked to the Sultan of Johor, owns a 10% stake and the balance of 9% is held by Trisilco Equity Sdn Bhd.

Currently, the company is negotiating with the Public Private Partnership Unit under the Prime Minister’s Department to settle the RM2.9 billion it is claiming from the government for not being able to raise fares according to the concession agreement.

Meanwhile, filings with the Companies Commission of Malaysia in December 2016 show an increase in “liability secured under a charge” from RM940 million to RM4.08 billion by ERL.

The charge was originally lodged in late 1998 as a soft loan provided by the government to help ERL finance a portion of the RM2.4 billion cost to build the KLIA Ekspres.

Based on ERL’s financials as at June 2015, the outstanding debts owed to BPMB have ballooned to RM2.8 billion in total — RM1.071 billion under a “BPMB facility” and RM1.73 billion under a “repayment facility”.

ERL, which seems to be struggling to service its debts, has requested deferment of instalments for the Repayment Facility due on May 5, and Nov 5, 2015.BPMB agreed to the deferments.

While ERL’s FY2016 financials have not yet been lodged, sources familiar with the company say that some debt repayments were met during the financial year, reducing total borrowings to RM2.3 billion. To meet the obligations however, it is understood that additional capital had to be injected into the company.

But given ERL’s losses, this is not sustainable and repayments have to be deferred as part of a wider debt restructuring. ERL posted an after tax loss of RM4.07 million in FY2015.

This is the second time that ERL needs to restructure its debts. The BPMB and repayment facilities were both restructured in 2005, with the Finance Ministry’s approval, according to ERL’s financial statements.

The previous restructuring fixed the interest rate for both the facilities at zero — from January 1999 to January 2012 and from November 2002 to November 2015 respectively (see Table 1). The BPMB Facility was then subject to an interest rate of 13.01% per annum from January 2012 to January 2024. The Repayment ­Facility was subject to an interest rate of 11.3% per annum starting from November 2014 to November 2027.

Presently, additional deferment of the debt repayments is crucial for ERL if the company hopes to turn a profit. The 30-year extension will be meaningless if the repayments outpace the growth in operational profits.

Based on ERL’s liquidity risk analysis, the company would have to repay RM1.178 billion over two years (July 2015 to June 2017). In total, the terminal cash value of the debts would amount to RM3.57 billion based on the current repayment schedule.

While ERL is operationally profitable — making RM122.09 million in FY2015 — its earnings are grossly insufficient to meet its obligations.

At face value, it appears that the excessive debts may cause the downfall of the ERL project. However, this should not be the case given the relatively lenient interest and repayment terms of the debts thus far.

In fact, it is quite surprising that the ERL project is struggling financially at all.

After all, it services one of the top 10 busiest airports in Asia-Pacific, with over 51 million passengers a year. Besides, KLIA is far from the city centre — 67km by road — which increases the appeal of rail travel.

The addition of klia2 to the ERL’s line was also a huge windfall — it more than doubled ridership volumes to a record 11.03 million in 2015. The government even paid the RM100 million cost to connect klia2 to the KLIA Ekspres line in 2014.

On top of that, ERL’s revenue is substantially boosted by the PSC collection. In FY2015, the RM70.9 million of PSC revenue collected made up 28.8% of the total revenue that year — RM246.2 million. Fare revenue was RM175.15 million.

Whopping RM2.9 bil claim

It could be argued that ERL is loss-making because it was not ­allowed to raise fares in line with the fare schedule under the original concession agreement. Consequently, it is claiming RM2.9 billion in compensation.

However, it could be argued that the ERL fare schedule is highly unrealistic. Based on it, fares for the express service should have been increased to RM41 in 2004, RM56 in 2009 and RM74 in 2014. By 2024, the fares would be a hefty RM126 for a single trip.

Instead, the fares were kept at RM35 for many years before being increased to RM55 a trip in late 2015. This hike, however, caused passenger volumes to fall for the first time, down 12% year on year to 9.7 million in 2016.

This is not entirely surprising given there are ample alternatives to the ERL. Services like Grab that can easily seat more than one passenger are offering airport rides for as low as RM65. Meanwhile, airport shuttle buses can be as cheap as RM17 for a one-way trip.

Based on the fare schedule, ERL would be charging RM74 for a one-way ride today. That would be about the same fare an airport taxi would charge to most areas in the Klang Valley. Clearly, the RM74 fare would not make commercial sense.

ERL is currently adding six more trains that will boost capacity by 50%. Hiking the fares further at this point would be counter-productive when more ridership is needed.

Thus, asking for higher PSC revenue makes more sense for ERL as it would not impact the rail’s ridership volumes.

Sources familiar with ERL however, point out that the PSC hike is unrelated to the compensation negotiations with the government.

But combined, the 30-year extension, higher PSC charges, and the debt restructuring will definitely serve ERL better than the original fare-hike schedule.

Meanwhile, the government is compelled to negotiate with ERL or be forced to pay the RM2.9 billion.

“Although the fare compensation calculations that were fixed in the concession agreement do not appear to be fair to the government, the attorney-general has advised that the formula that was set in the agreement is binding on the government,” reads the Auditor-General’s 2016 report.

“Alterations to the compensation formula can only be done with agreement from both parties,” notes the report.

 

http://www.theedgeproperty.com.my/content/1050850/express-rail-link-facing-financial-woes

[KK Lee 5]

If parties involved intended to resolve the debt issue could replace the 11% p.a bpmb loan with gomen guaranteed bond for about 5% p.a.

Edited February 1, 2017 by KK Lee

[leon t 0]

for one the ERL is too expensive as now it osts rm55 per person and not forgetting that from sentral, passengers and esp visitors will have to take a taxi to their hotels which will add another rm15 to rm25 easily. For that total amount one would be able to take a standard airport taxi. And if there are 2 persons, a taxi would cost cheaper too and straight from airport to the destination.

[Mohd Suhaimi Fariz 2]

for one the ERL is too expensive as now it osts rm55 per person and not forgetting that from sentral, passengers and esp visitors will have to take a taxi to their hotels which will add another rm15 to rm25 easily. For that total amount one would be able to take a standard airport taxi. And if there are 2 persons, a taxi would cost cheaper too and straight from airport to the destination.

 

It's only expensive if you earn MYR. If you earn SGD/GBP/USD/AUD/NZD then it's cheap.

 

At RM 55 per person it's still too low to cover the actual costs of running a high speed train. Plus KUL is well connected on ground with so many roads to choose from. For the locals ERL is hardly needed. I'd say get rid of the direct ERL service & focus on the KL Transit link. Surely that would cost less & have higher ridership to cover.

[Din Hilmi 0]

 

It's only expensive if you earn MYR. If you earn SGD/GBP/USD/AUD/NZD then it's cheap.

 

At RM 55 per person it's still too low to cover the actual costs of running a high speed train. Plus KUL is well connected on ground with so many roads to choose from. For the locals ERL is hardly needed. I'd say get rid of the direct ERL service & focus on the KL Transit link. Surely that would cost less & have higher ridership to cover.

 

With high volume of users during peak hours, dont think passengers to airport would be please to stand up all the way from XKL, or to wait to catch another train if ones already packs with people.

[JuliusWong 0]

I think major airports which desperately need direct connection to city centre would be Sydney and Melbourne. KL itself I would say not so much since they are many other options as what Suhaimi has stated above.

 

ERL, high speed railway, earning MYR, three words to summarise ERL is not something that average Malaysians can afford. God knows if KL-Singapore HSR commences.

Edited February 2, 2017 by JuliusWong

[flee 5]

One of the reasons why costs are high is because the government is deeply involved in this. Why must there be a "concession" agreement? Why can't the railway be built and operated on a commercial basis? If it is not economically viable, then no company will take up the project and we will all have to use other more economic modes of transport like buses and taxis.

[Mulyadir Fitri 0]

If they cannot make money now when they have a monopoly, expect them to sink further into the abyss once the Sg Buloh Serdang Putrajaya MRT comes online.

[KK Lee 5]

If they cannot make money now when they have a monopoly, expect them to sink further into the abyss once the Sg Buloh Serdang Putrajaya MRT comes online.

Whatever, the concession holder will be compensated with billion of rm.

[JuliusWong 0]

Whatever, the concession holder will be compensated with billion of rm.

YTL staff is looking for fat bonus end of 2017...

[Kee Hooi Yen 0]

I think major airports which desperately need direct connection to city centre would be Sydney and Melbourne. KL itself I would say not so much since they are many other options as what Suhaimi has stated above.

 

 

I believe SYD Airport Link, the operator for the train service between Sydney Central station and SYD airport has agreement with the government that prohibits bus services to / from SYD airport. Besides the train service, pax are only left with options of taxi & airport shuttles (with surcharge) and driving (expensive parking). Despite this, it is said that Airport Link company still fail to meet the targeted pax number.

[jani 0]

One of the reasons why costs are high is because the government is deeply involved in this. Why must there be a "concession" agreement? Why can't the railway be built and operated on a commercial basis? If it is not economically viable, then no company will take up the project and we will all have to use other more economic modes of transport like buses and taxis.

Without concessions, almost no infra project will take off....

[flee 5]

Without concessions, almost no infra project will take off....

I am stupid - perhaps someone can explain to make me understand.

 

In the days before privatisation, all infrastructure projects were undertaken by the Public Works Department (JKR). There was not much of a problem then and costs were reasonable. Furthermore, public train services from KTM seems to be available at reasonable cost too.

 

Once the government started to privatise infra projects, costs seem to swell beyond reasonable limits. Granted the quality of the construction is of a better standard, the ballooning of costs seems disproportionate to the scale and quality of the projects. Many special purpose companies were set up, each of them wanting to make monopoly profits.

 

With these privatised projects, the rakyat still have to pay more - we pay a lot more for cars, fuel subsidies are cut, we pay GST, we pay tolls, we pay all sorts of charges and taxes, etc.

 

If the JKR can construct infrastructure at reasonable cost, why don't we go back to that model? So what gives - where is the supposed efficiency of privatisation being realised? The whole rationale for privatisation has gone down the drain...

[BC Tam 2]

Once the government started to privatise infra projects, costs seem to swell beyond reasonable limits. Granted the quality of the construction is of a better standard, the ballooning of costs .....

You may want to qualify that somewhat, when you see structures from 'past era' still standing proud where they remain whilst many 'modern day' constructs need be cladded in an outer skin to hide the effects of wear and tear