The government has extended the concession of Express Rail Link Sdn Bhd (ERL) to operate KLIA Ekspres and KLIA Transit from 2029 to 2059.
Transport Minister Anthony Loke said the 30-year concession extension would enable ERL to determine the fare based on the market rate with immediate effect. The government will also not be paying any charges or fees from the revenue of Passenger Service Charge (PSC) to ERL from 2029 onwards.
Currently, ERL is receiving PSC collection amounting to RM1 for each domestic flight passenger and RM5 for international flight passengers through KLIA.
“The approach is seen as a win-win situation. Consumers will also benefit from better ERL services…the government said it is committed to encouraging and adding alternative services to KLIA (Kuala Lumpur International Airport), which will create healthy competition.
“Therefore, it is ERL’s responsibility to always ensure the achievement of a balance between optimising revenue and offering the best service options to users. ERL needs to ensure that the services provided are always at an optimal level in line with the fares charged,” he said.
He added the concession extension, which was reached earlier, allows ERL to plan and implement investments to improve its facilities and services.
Thus, ERL needs to work on improving its service quality to attract more passengers using both rail services which connect the Kuala Lumpur city centre and KLIA.
KLIA and ERL are the ‘first impression’ that shape the image of Malaysia to visitors from all over the world. Therefore, ERL has an important responsibility as the operator of a very special train service in safeguarding the nation’s good name,” Loke said.
Meanwhile, ERL chief executive officer Noormah Mohd Noor said that apart from the extension of concession, the agreement also comes with a 70:30 profit-sharing mechanism between the government and ERL, whereby the government will be able to share profit with ERL if the shareholders’ internal rate of return (IRR) crosses the 10 per cent threshold.
