RIDP expected to increase local content in rail industry by at least 45%

KUALA LUMPUR (April 19): The Rail Industry Development Programme (RIDP) under the Strategic Industries and High Performance SME Improvement Programme (Prestige) is expected to increase the percentage of local content by at least 45% in several components of the rail industry that have been identified by 2030.

Transport Minister Datuk Seri Dr Wee Ka Siong said that through this programme, local industry players would be identified according to their respective clusters of expertise and given the opportunity to transfer technology with original equipment manufacturers (OEMs).

Apart from that, he said, the programme could also increase the capacity and marketability of the industry. “They will also be matched with key companies to ensure local companies have the opportunity to increase their capacity and remain competitive,” he said at the launch of the RIDP here today.

Also present was Minister of Entrepreneur Development and Cooperatives (MEDAC) Datuk Seri Dr Wan Junaidi Tuanku Jaafar.

According to Wee, so far there is only 20% local content for the rail industry component, where with a more organised ecosystem, he is confident that the target can be achieved and subsequently penetrate the Asean market.

Eight SMEs have been selected to participate in the RIDP organised by MEDAC through SME Corp Malaysia and the Transport Ministry through the National Rail Centre of Excellence and Technology Depository Agency Bhd.

He said the companies selected for the programme would be involved in manufacturing the internal components of railway carriages, fibreglass panels, doors and gangways as well as railway carriage maintenance services, rail systems and brake systems.

He hoped local industry players will support the maintenance and overhaul programme of rail assets, as well as increase the lifespan and operability of railway assets by up to 30-40 years in the future.

On the development of the national rail project, Wee said the rail project was expected to develop more rapidly in the next ten years with seven construction projects already approved by the government involving the addition of about 1,030 kilometres of rail tracks.

“The need for ‘rolling stock’ for passengers and cargo will also increase in line with the increasing demand for rail-based modes of transport,” he said.

He said the rail industry would also be an important contributor to the economy, able to meet local and regional demand as well as produce high-skilled workers and be recognised internationally.

Meanwhile, Wan Junaidi said the rail industry had contributed RM43.05 billion to the country so far and is expected to need 50,000 skilled workers by 2030.

He said the RIDP identifies and enhances the capabilities of high-growth small and medium enterprises (SMEs) in the rail sector, in line with the National Transport Policy 2019-2030 and the National Entrepreneurship Policy 2030.

The RIDP targets three strategic objectives, namely increasing the number of high-growth and innovative companies in the rail industry; increase the productivity and quality of SMEs in the rail industry; as well as expanding the involvement of local SMEs in the domestic and international rail supply chain.

SMEs selected for this programme will go through capacity building activities and be eligible for financial assistance of up to RM500,000.

“The assistance is given in the form of matching grants for transformation activities that include standards and certification, adaptation of new technologies and marketing strategies to penetrate the global supply chain,” said Wan Junaidi.