This urban monorail line was opened on 31 August 2003, with 11 stations running 8.6 km (5 mi) on two parallel elevated tracks. It connects the KL Sentraltransport hub in the south and Titiwangsa in the north with the "Golden Triangle", a commercial, shopping, and entertainment area comprising Bukit Bintang, Imbi, Sultan Ismail, and Raja Chulan.
The monorail scheme was announced by Kuala Lumpur City Hall in January 1990 after the Malaysian Government gave the go-ahead to the scheme at a cabinet meeting in June 1989. Its cost was then estimated at RM 143 million. The 14-km, 22-station system is designed to carry more than 34,000 passengers a day on a 20-minute loop through Kuala Lumpur's bustling commercial core. The plan is to build it in two phases: in the first, 16 stations will be serviced over 7.7 km; and in the later stage, another 6.5-km loop will be added. The first phase was expected to be completed within two years.[1]
Plans dating back to the 1990s envisioned the Monorail to go all the way to Mid Valley, Abdullah Hukum and Taman OUG.[2]
Work was scheduled to begin in June 1990, but was postponed to May 1991, after the city's mayor complained that tenders submitted for preparatory work were too high. There has been no activity on the project since and few details are available on how the project is expected to proceed. The main contractor is a local company, BNK, which had little success in its search for backers to finance its share of the venture. Part of its problem in securing money stems from the project's escalating cost estimates, and part from its lack of a track record in handling such huge projects.[1]
Construction was re-initiated by Hitachi, Ltd., but the 1997 Asian financial crisis led to cessation of work in December 1997. When work was resumed in July 1998, MTrans Holdings took over, locally manufacturing its own rolling stock and completing the project to save cost;[3] the line was completed at a cost of MYR 1.18 billion. As the line was opened in 2003, it was agreed that the parent company and owner of the KL Monorail Line, KL Infrastructure Group, would hold a 40-year concession to operate the monorail. The line and number of stations remains unchanged since 2003.
Since the start of operations, the KL Infrastructure Group suffered losses due largely to depreciation and interest repayment costs.[4] For the financial year to 30 April 2004, KL Infra posted a net loss of MYR 46.24 million on a MYR 15.08 million revenue.[5] KL Infra had also taken up a MYR 300 million Malaysian government loan and a MYR 260 million infrastructure loan from the Bank Pembangunan Malaysia Berhad (BPMB) (The development bank of Malaysia) (Malay: Bank Pembangunan Malaysia, BPM). In addition, KL Infra had proposed to buy MTrans' three subsidiary companies to improve its business, but failed after Scomi bought up some of the targeted companies.[4]
Government takeoverEdit
In April 2007, talks were under way between KL Infra and the government and the Bank Pembangunan Malaysia Berhad to sell the KL Monorail Line to the Prasarana Malaysia, which then had already owned both the Kelana Jaya Line and the Ampang Line, as well as 10% of KL Infra shares. KL Infra was cited as intending to exit Malaysia's monorail business. The takeover is part of the government's master plan to improve the urban public transport sector.[4][6]
SPN gave its agreement in principle to the takeover on 22 December 2006 and a follow-up meeting was held on 6 February 2007 with the government on the takeover of its operational assets and assumption of loan liabilities. A due diligence audit was conducted from 5 March 2007 to 27 April 2007 by consultants appointed by the government. Following agreement to the takeover, BPM granted KL Monorail an extension until 29 April 2007 for an interest repayment amounting to MYR 4,244,801.91, which was originally due on 29 December 2006.[7]
However, the takeover seemed to have suffered a setback at least from the perspective of KL Infra when on 26 March 2007, it was notified by BPM that it was not going to entertain any further extensions for interest repayment. Subsequently on 27 April 2007, the bank notified that it would not be granting any moratorium on interest repayments. On 29 April 2007, KL Monorail was not able to make the repayment of the interest instalment which had become due.[7]
On 3 May 2007, KL Monorail was issued a default notice by BPM which sought repayment of the entire principal sum of MYR 609,616,423.73 and capitalised interest of MYR 296,428,910.88 totalling MYR 906,045,334.61. The company was granted seven days from that day to repay the entire sum, which it failed to do. On 14 May 2007, Mohd Anwar Bin Yahya and Cho Choo Meng were appointed receivers and managers by Amanah Raya, the Security Trustee for BPM. Nevertheless, the takeover process is still deemed ongoing, KL Infra stating that it will continue to engage the government and BPM to address the proposed takeover of KL Monorail by Prasarana based on earlier discussions and an approval in principle.[8]
One of the effects of the appointment of receivers and managers is the possibility that KL Infra will not be receiving any compensation for KL Monorail should the takeover by SPN go through.[9]
The trading of KL Infra was suspended from 15 May 2007.[10] On the same day, KL Infra's board announced to Bursa Malaysia that it had formed the opinion that it was not solvent and would not be able to pay all its debts in full within a period not exceeding twelve months.[11] On 28 November 2007, Prasarana Malaysia signed a sale-and-purchase agreement with KL Monorail Systems, effectively making Prasarana the operator of KL Monorail, and resulting in Prasarana taking over the MYR 882 million BPM loan.[citation needed]
