a day ago
Sabah may stay poor due to GLCs
Published on: Sunday, June 08, 2025
Published on: Sun, Jun 08, 2025
By: Datuk John Lo Text Size: Badly managed GLCs is one of the worst economic problems of Sabah. The GLCs have become a bottomless pit. No matter how much extra revenue the GRS Government can generate or how much more funding it can get from the Federal Government or how much more investments it can attract, Sabahans will remain poor. All these money cannot cover this ever-expanding hole by badly managed GLCs.
Advertisement Singapore's GLCs [e.g. SIA, DBS, Capital Land] are big economic boosters, making profits in billions. Sabah's GLCs are big liabilities, losing billions over the years. Sabah's GLCs make outsiders rich, impoverish Sabahans. They practice 'Sabah for NON-Sabhans', NOT 'Sabah for Sabahans'. GRS Government has started the GLC Transformation. The GRS Government has started the GLC transformation because it has realized this bottomless GLC problem. It must be plugged or else Sabah will remain poor always.
Advertisement Well known fact that Sabah's GLCs have: [1] Proliferated in number since the mid-1980s. [2] The increase in number has little economic logic or strategy. more for expediencies and political accommodation. Chairman appointments of big GLCs are special reserves for warlords. Senior management jobs for relatives and macai. [3] The number of GLCs has grown to more than 250. The Assistant Minister of Finance has confirmed this number in the press. [4] Big majority of GLCs have in total lost billions over the years, some are still heavily debt ridden, poorly managed and lack governance. [5] The GLCs have incurred huge liabilities for the many past lopsided agreements signed by GLCs and Malayan companies. [6] The GLCs have produced most failed and/or delayed JV projects with Malayan companies. There are 7 or 8 in KK alone as testimonies of the GLCs' failures. One GLC has failed to launch a major tourism project for more than 10 years. Sabah GLCs love Malayan companies, sideline Sabah companies. No love for 'Sabah for Sabahans.' They love 'Sabah for Malayans'. [7] Return on capital and assets are poor, mostly negative! [8]. The non-performing GLCs have not helped to build up Sabah's economy. Instead, they are destroying it. The GRS government, for the first time in Sabah's history, has initiated transformation after many public warnings by Hajiji and Masidi on the unsatisfactory and sad situation in the GLC. Already announced are these big moves. First, AG Brenndon and MOF Assistant Minister have confirmed the formation of the Oversight Committee. This is an important first step. Second, AG Brenndon has confirmed that all agreements to be signed by GLCs must be referred to and vetted by his Chambers before submission to the Cabinet. Knowing Brenndon, he would not tolerate any lopsided agreement at Sabah's expense. Many Sabahans are extremely concerned about the poor performance of GLCs. This is common talk among folks in Sabah. Not in complimentary tone. Reflective of this sentiment, more than 70, 000 viewers have visited the podcast by SABAR on GLCs in the Kopitiam Council's YouTube platform. It is very positive that Hajiji and Masidi have started to solve Sabah's GLC-massive-headache. Likewise, other leaders should consider offering their ideas/solution in the run up of the 2025 election. Better still, include their plan to transform the GLCs in their manifestos. The GLC problems, no doubt very tough, must be resolved because they are bleeding Sabah dry. GLCs dominate every important economic sector in Sabah. Simple logic. GLCs' combined failure to perform in these sectors has inflicted Sabah's overall economy like CANCEROUS CELLS. All Sabahans, especially the vulnerable B40 suffer. The GLCs are depriving future generations of their economic opportunities. Followings are some token samples: [1] GLCs are in control of Sabah's Financial Institutions [SDB, SCC]. [2] GLCs are in effective control of many natural resources: mining/minerals [SMM], timber and FMUs [Innoprise, SOFODA]. [3] GLCs hold many monopolistic rights: Cement [Sabah Cement Industries], Ports [Suria, POIC Sandakan and POIC LD], Water [Jetama]. Fishing landing rights [SAFMA]. [4] GLCs have been granted practically free and extremely prime land, most of them at RM1,000 premium. [Innoprise, SUDC of SEDCO, Suria, SICC, Sabah Energy, TAED.]. [5] GLCs have been granted vast acreage of valuable agriculture land for free or at nominal premium. [Sawit Kinabalu, KPD, Sabah Softwood.] [6] GLCs have been granted cheap and valuable land for industrial park [KKIP, SOGIP, POIC Sandakan and POIC LD, ASEAN Supply Base in Labuan] [7] GLCs have been granted concession rights in oil and gas, river and sea sand [Sabah Energy, Sabah Gas, SMJ Energy, SEDCO]. [8] GLCs are in hotels, resorts and jungle resorts [Innoprise, SEDCO and Sabah Air] [9] GLCs have been granted exclusive JV preference mostly with Malayan companies. Summary: you name it, GLCs are in it. GLCs control it. GLCs are the preferred choice for almost every economic activity in Sabah. GLCs are given priority in any new business, depriving opportunities for Sabahan businessmen. Despite of all the huge advantages, most of them are doing very badly. The GLCs are in competition Sabah's private sector in the most unfair manners. They are killing our Sabahan investors, entrepreneurs, and even small SMEs. Chairmen, Directors, Senior Management would have been sacked in the Private Sector. All business conglomerates would NOT have tolerated the bad governance/management of the board of directors, senior management of Sabah's GLCs. They would have been sacked long time ago. The shareholders would not tolerate such persistent non-performance and abuses. The GLCs can afford to continue with their perennial state of abuses, bad-performances, losses and giving perks away is because Sabahans, you and me, our future generations are paying for their perpetual good lives. Does Sabah need 250 GLCs? How may officers and staff needed by GLCs Pertinent questions. I would not venture to guess. However, one thing is certain, a great number of them are existing to give jobs, perks and political accommodation or favours. Will not surprise if majority of them would not be able to justify their existence in a proper revamp exercise. As can be seen in the list above, badly managed monopolies, special concessions granted by the government, land given for free, duplication, competition against each other are common features among these GLCs. Pertinent question 2. After years and years of losses, the iron rice bowl mentality is as strong as ever. Petronas has reduced 10% of its work force because petroleum prices are dropping. No iron rice bowl in Petronas. A thorough revamp, transformation and rationalization is long overdue. Let the leaders in this election answer this question. Good leaders will give you the right and logical answer. Solve the GLCs Problems, 50% economic Sabah's problems are Solved. Why is this? Because the GLCs are burdening down, big liabilities in almost all the sectors of Sabah's economy. If the GLCs can be transformed to perform, all the sectors that they are in will create an economic boom in Sabah. Imagine: [1] If each GLC, on average, can create 100 jobs, 25,000 Sabahans will have employment. Sabah's unemployed graduates will be over. [2] If each GLC, on average can make RM10m, total will be RM2.5b, RM20m, it will be RM5b. Given all the freebies like land, monopolies, concessions and no capital cost, such profits can be within easy reach. SMJ Energy's profit is already RM250m in 3rd year of existence. KPJ Hospital [Johor SEDCO] makes RM350m a year. [3] Sabah GLCs should emulate KPJ Hospital, expand beyond Sabah or go international. This is possible when there is a proper Board of Directors and good senior management. Hajiji and Masidi have appointed the right people in some GLCs already. Vast improvements in their performance. 3 myths that must be dispelled. First: Sabah does not have the right people to manage the GLCs properly. Not true. Remove the useless ones, good Sabahans can be found. Second: GLCs cannot be turned around. Appointing right chairmen, directors and senior management, the turn-arounds will be possible. Examples: [1] SDB is being revamped. Lim Haw Kuang, former Executive Chairman of Shell in China and Director BNM has been appointed as Executive Chairman. The Board of Directors are credible people. No political interference. RAM has just given SDB top rating! [2] SMJ Energy is performing exceptional well with a highly regarded Board of Directors and well qualified senior management team. Its profit in 2024 is RM250m. [3] Sabah Energy Corporation, Sabah Credit Corporation are being managed professionally. They are doing very well. SEC may become the biggest gas aggregator in Malaysia! SCC has proven that it can do some social financing and be profitable! [4] Hajiji has appointed James Wong as GGM to revamp SEDCO. [5] POIC LD has been turned around with Yong Teck Lee as Chairman and Fredian Gan CEO. It is now undertaking a major expansion that will make POIC LD a marine hub for Sabah. POIC LD is showing the way that it can monetize its landed assets, FZ approval from Federal MOF and its deepest ports in this region. [6] Innoprise has been transformed, vastly improved by forward looking executive chairman Jasnih and a professional team. Thirdly, GLCs can make sizeable profit [in hundreds of millions of RM]. E.g. SMJ Energy. GLCs in plantations, GLCs with monopolies and GLCs give free land have potential to make a lot more. Let's pray Leaders of all Parties will Focus on GLC Transformation. Yes, Sabahans better pray hard that Sabah leaders will focus on transformation of GLCs. Successful GLC transformation will mean prosperity. Failure? Continue poverty. The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: [email protected]
