Shaping the future of the transport sector
A key focus of the NTP is improving railways network
AGAINST the backdrop of a growing and ageing population, increasing urbanisation and rapid technological advancements, the government has set the path for the future of the country’s transport sector.
The National Transport Policy (NTP) 2019 -2030, unveiled by the Prime Minister on Thursday, emphasises on sustainability as the way forward, and aims to develop a sustainable transport sector that accelerates economic growth and support the people’s well-being.
It also has a key focus on improving the country’s railway network and services, and enhancing connectivity in view of the e-commerce boom.
The policy, which covers the four main sectors - aviation, shipping, freight and land transport - acknowledges the need to improve the efficiency and sustainability of Malaysia’s existing transportation network, to support its aspirations of becoming a high-income nation by 2025.
As a trading nation, it is crucial for the country to ensure its transportation sector functions efficiently and sustainably.
The sector is seen as the backbone of the country’s growth, with the shipping sub-sector in particular facilitating the movement of about 98.4% of Malaysia’s total international trade.
Over the years, Malaysia has constructed over 200,000 km of roads, and more than 2,900 km of rail as well as 18 ports and 22 airports.
Two of the ports - Port Klang and Port Tanjung Pelepas - are now ranked among the top 20 in the world in terms of container volume, while KL International Airport is ranked 24th in the world in terms of total passengers handled.
In the aviation space, Airasia is known as one of the world’s leading low-cost carriers, while in the e-hailing scene, regional player Grab is a company that saw its beginnings in Malaysia.
The prime minister, in unveiling the policy, noted the NTP’S focus on the railway sector.
He said railway services in the country have been underutilised and that he hoped more people would use it in the future.
“In the future, we hope to have a developed rail system such as in Japan, (South) Korea and China.
“Our intention is to reduce the use of private vehicles on the road and increase the use of rail, especially for long-distance travel.
In essence, the NTP was developed with the aim of enhancing connectivity across regions, integrating different modes of transport, upgrading airport infrastructure, improving ports accessibility and capacity as well as optimising transport infrastructure.
It is the result of three years of close governmentprivate sector collaboration, with over 150 government personnel, academia and representatives from the private sector coming together over a series of workshops, focus group discussions and meetings.
The document outlines five policy thrusts, and is based on eight future trends identified by the government.
The trends include a growing and increasingly ageing population; increasing urbanisation; advances in real time information and digitalisation; expansion of the e-commerce market; and the shift towards environmentally sustainable transport.
The other trends are the move towards bigger vessels, consolidation and containerisation; increasing passenger travel and impact of lowcost carriers; and the proliferation of new technology.
The policy thrusts, on the other hand, are strengthening governance; optimising, building and maintaining transport infrastructure, services and networks; enhancing safety, integration, connectivity and accessibility; advancing towards a green transport ecosystem; and promoting the internationalisation of transport services.
Setting achievable targets
The question, though, is whether the policy really hits the spot when it comes to addressing the key issues the country’s transportation sector is facing.
One analyst from a bank-backed brokerage is of the opinion that while the policy sets crucial targets for the sector, it is not very comprehensive in how these targets will be implemented.
“The underlying framework and issues to push this through is key.
“There are still many issues to be ironed out,” says the analyst, who declined to be named.
For one, he says, there is the question of the set up of Malaysian Aviation Commission (Mavcom) in implementing the regulated asset base (RAB) framework, which has not been rolled out yet.
Mavcom, at end-august, had said that it was in the “final stages” of establishing the tierbased airport charges, called the RAB, which is to be implemented next year.
Another transportation analyst, meanwhile, notes that as the NTP was merely a policy, and not a masterplan or a roadmap, the plans were very general in nature, without any specifics mentioned.
“For instance there are no definite information such as figures or locations mentioned in relation to the future plans outlined for the transport sector,” he says.
He says, however, that the focus on railway indicated that some companies involved in this area may benefit from the government’s plans in the future.
He also noted that the discussion on the current weaknesses in the railway network and the safety issues were important, and would benefit the sector as a whole.
“Of course, the most important things to consider, moving forward, will be implementation and enforcement,” says the analyst, who is attached to a local brokerage.
As for Aminvestment Bank Research, it is more optimistic about the NTP, saying that the initiatives are positive to the sector, but will take time to materialise.
The research house expects port operators such as Westports and MMC Corp, as well as and logistics players like Pos Malaysia and GD Express Carrier Bhd (Gdex) to be beneficiaries of the new policy.
This, it says, is assuming that the Transport Ministry will put in place initiatives and assistance to facilitate the upgrading of infrastructure and facilities to improve efficiency and connectivity within the sector.
Another key initiative in the NTP, it notes, is the fifth policy thrust, which seeks expand the country’s global footprint and promote the internationalisation of Malaysia’s transport services.
The key strategies under this policy thrust include creating an environment that facilitates local transport industry operators to become regional or global players, facilitating regional cooperation and agreements that improve the industry; and ensuring that transport-related agencies are sufficiently equipped to support the drive in improving Malaysia’s ranking in global competitiveness indices.
MIDF Research, meanwhile, in a comprehensive report on the NTP, says the policy will function as one of the main pillars to strengthen national transport infrastructure.
“Overall, we applaud the government’s plans laid out in the latest NTP as it signals a paradigm shift in the making,” it says.
The research house remains optimistic on Malaysian ports given their strategic location along major trade lanes and the economic prospects of the Asean region, driven by the emergence of regional distribution hubs.
However, for the logistics industry, it anticipates higher demand for e-commerce activities will attract more new entrants, prompting price competition and compressing margins.
As for the government’s plans to focus greater attention on ensuring higher utilisation of public transport services, it expects growth to continue for the ridership of public transportation such as they LRT, KTM Komuter and KVMRT Line 1.
The introduction of the unlimited monthly passes, it adds, will further encourage the use of public transportation in the near term.
On a longer term, the research house expects the completion of KVMRT Line 2 in 2022, connecting Sungai Buloh, Serdang and Putrajaya to accelerate the usage of public transportation.
It says a spillover effect would be felt for last mile delivery providers such as GDEX as lesser cars on the road would enable faster delivery of goods to the customers, particularly in the Klang Valley.
Overall, the consensus is that while the NTP has defined and outlined plans for for the future of the Malaysian transportation sector, more specific information on how current issues and challenges will be handled need to be outlined.
These are likely to come in the form of further sector-specific masterplans or roadmaps, such as the previous and the soon-expiring Malaysia Shipping Masterplan 20172022, or the upcoming National Automotive Policy 2019.