KUALA LUMPUR, May 2 (Bernama) -- The government has launched the Public Transport Fund worth RM500 million and a two per cent financing rate subsidy for successful fund applicants, says Finance Minister Lim Guan Eng.

The Public Transformation Fund, managed by Bank Pembangunan Malaysia, is aimed at encouraging the use of public transport and expediting its adoption by further improving the infrastructure and connectivity.

“Through this fund, we hope to increase the number of people using public transport by financing the system’s improvement,” he said after launching the fund here today.

The funding may be used to purchase vehicles like taxies, buses or other public transport vehicles, and can be utilised by the operators, suppliers, manufacturers and assemblers of public transport vehicles and contractors, as well as developers of this infrastructure.

Lim added that despite the heavy investment in rail and bus services, the public transport modal share remains low, and he admitted that there is still some room for improvement in the public transport system.

“Comparing the modal share for public transport for Kuala Lumpur with the most developed public transportation infrastructures, that for the capital city only stands at around 20 per cent compared to Jakarta (36 per cent), Bangkok (30 per cent) and Singapore (67 per cent),” he added.

Bank Pembangunan Malaysia chairman Datuk Zaiton Mohd Hassan said the subsidy, which will focus on proposals related to last-mile services, will be disbursed as soon as possible.

“We are looking at all possibilities and e-hailing service providers are not excluded, and I believe the fund would be quickly distributed as the amount is not that big.

“And most importantly, the days when we provide one big loan to a company are gone, now we are looking at inclusivity. The subsidy of two per cent will be based on the financing rate given to an applicant on a case-by-case basis depending on the company’s credit performance,” she said.

Zaiton also expressed hope that the fund would be able to encourage businesses in Malaysia, particularly public transportation operators, to enhance the existing infrastructure, with suppliers, manufacturers and contractors of public transport infrastructure applying for it.

According to the 2015 World Bank report, transport costs are 50 per cent higher in Kuala Lumpur compared to Hong Kong and Tokyo.