MoF receives surat layang that accuses KTMB CEO of wrongdoing

Mohd Rani Hisham had taken the helm at KTMB in September 2017. Photo by Kenny Yap/The Edge

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This article first appeared in The Edge Malaysia Weekly as "KTMB CEO said to be stepping down next month", on August 12, 2019 - August 18, 2019.

KERETAPI Tanah Melayu Bhd (KTMB) CEO Mohd Rani Hisham Samsudin will be stepping down after two years at the helm when his current contract expires next month, sources say.

It is understood that the Ministry of Finance (MoF) will not be renewing his contract. KTMB is an entity under the purview of MoF.

A person with knowledge of the matter tells The Edge that the decision to not extend Mohd Rani Hisham’s contract came in the wake of a “surat layang” or poison pen letter sent to the MoF, accusing him of wrongdoing.

“MoF had requested KTMB’s board of directors to verify the veracity of the letter’s contents,” the person says.

According to another source, an internal audit was held to investigate the allegations.

“The audit has been completed and presented to the board, which cleared Mohd Rani Hisham of any wrongdoing. The board is expected to submit the audit report to MoF anytime soon,” says the source.

Mohd Rani Hisham declined to comment when contacted by The Edge.

Mohd Rani Hisham took the helm at KTMB on Sept 15, 2017, replacing Datuk Sarbini Tijan whose contract ended on April 30 the same year. Even though he was appointed during the previous administration, Mohd Rani Hisham was spared the leadership shake-out at public institutions and government-linked companies following the change of government in May last year.

A graduate of Northrop University in the US, Mohd Rani Hisham was former group CEO of Pos Aviation Services Sdn Bhd (previously known as KL Airport Services Sdn Bhd) under DRB-Hicom Bhd. He was also former CEO of KN Sime Logistics Sdn Bhd.

A check with CTOS filings show that KTMB had slipped into the red with a net loss of RM23.59 million in the financial year ended Dec 31, 2017 (FY2017), compared with a net profit of RM63.22 million in FY2016. Revenue was up 2.3% to RM624.93 million from RM610.68 million. It has yet to file its financial statements for FY2018.

Another source says the poison pen letter follows a letter sent by Mohd Rani Hisham to Finance Minister Lim Guan Eng in February, in which the CEO had expressed the national railway company’s unhappiness with Dhaya Maju Infrastructure (Asia) Sdn Bhd’s (DMIA) performance in undertaking the first phase of the Klang Valley Double Track project (KVDT1) worth RM1.41 billion. Transport Minister Anthony Loke received a copy of the letter.

The Edge had on April 8 reported KTMB as saying, in the letter dated Feb 21, that it was dissatisfied with DMIA’s lack of competent staff, weakness in the scheduling of its work plans and insufficient construction equipment such as earth poles, while certain materials such as rail and point machines had failed to meet the standards specified in the contract.

It claimed that this had resulted in the disruption of its train operations and a decline in passenger volume.

KTMB added that due to these factors, it would be improper for the government to consider DMIA’s participation in the KDVT2 project through an 80:20 joint venture with Lembaga Tabung Angkatan Tentera (LTAT) under Dhaya Maju LTAT Sdn Bhd.

The letter then named India’s IRCON International Ltd, MMC Gamuda JV Sdn Bhd, IJM Construction Sdn Bhd and Emrail Sdn Bhd for consideration when appointing the new contractor for KVDT2.

DMIA chief operating officer Datuk Mohamed Razeek Md Hussain Maricar told The Edge in a previous interview that KVDT1’s initial completion date for this year was moved to July 2020 because of restrictions in accessing the work sites, which delayed its work.

“One of the misperceptions is that Phase 1 is facing delays. But the fact that we have been given an extension by our client (MoT) testifies to the fact that the delays were beyond our control. We will try to complete the job by July 2020,” he said.

The KVDT2 comprises the rehabilitation of two KTMB railway tracks — one from Salak South to Seremban and the other track from Kuala Lumpur Sentral and Angkasa Puri to Port Klang — measuring 211 km in total.

To recap, the government terminated its contract with Dhaya Maju LTAT in September last year due to high costs and the manner in which the contract was awarded via direct negotiation by the previous government.

But on July 9, the government had re-awarded the KVDT2 rehabilitation contract to Dhaya Maju LTAT, but at a contract value that is 15% lower than the original RM5.26 billion, explaining that it was to mitigate any legal implications of the contract termination to the government.

 

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