The government will complete the takeover of the assets and operations of two debt-laden light railway operators by June, the finance ministry said today.

The acquisition of the two private light rail transit (LRT) systems is part of a major restructuring of Kuala Lumpur's public transport system, the ministry said in a statement.

Syarikat Prasarana Nasional Bhd (SPNB), a wholly owned unit of the finance ministry, will take over Sistem Transit Aliran Ringan (Star) and Projek Usahasama Transit Ringan Automatik (Putra).

"SPNB will take over all assets of Star and Putra ... will also take over the entire operating concession and will be the sole operator of the country's entire LRT system once the takeover is completed," the statement said.

"Under the government's initiative to restructure the public transport system, commuters can look forward to improved services."

The ministry said that work on improving operations of both LRT operators would begin after completion of financial restructuring.

Huge debts

The city has 56 kilometres of LRT track, but usage has failed to meet expectations.

Apart from buses, the LRT lines were the first public transport system in the traffic-clogged city of 1.5 million people.

In December 2000, the government announced it would take over the two private firms and in November last year purchased the outstanding debt of both systems amounting to RM5.5 billion.

Opposition parties at the time criticised the deal as another "bailout" of favoured firms by the government, who said the 1997/98 financial crisis made it difficult for the companies to repay capital or raise new loans.