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Daily Express
17 hours ago
- Business
- Daily Express
Poor governance of GLCs to blame: Managed by some people of questionable integrity and knowledge
Published on: Tuesday, June 10, 2025 Published on: Tue, Jun 10, 2025 By: David Thien Text Size: Datuk John Lo (right) shared his opinions in a 'Sabah Voices to Action' podcast with former Sabah Law Society President Datuk Roger Chin (left) with Kopi Tiam Council hosts Adi and Haffisz organised by NGO Sabar recently on 'Economic Imperative on Stringent Governance for Sabah's GLCs'. Kota Kinabalu: Many of the 250 GLCs continue to lose millions of ringgit yearly. In Kota Kinabalu alone, most of the failed big projects are GLC joint ventures with non-Sabahan companies. 'What it tells us is that all these GLCs have very, very poor governance and this is the whole issue in Sabah. They are managed by some chairmen and board of directors who are of questionable integrity or knowledge. So things just roll along without good performance.' Advertisement 'If all or even 75 per cent of GLCs are doing well, the State government should have been receiving billions of ringgit in term of returns every year because the assets controlled by the GLCs are in the hundreds of billions of ringgit,' said Datuk John Lo, retired banker and advisor to the State Government in his role in the Sabah Economic Advisory Council (SEAC) as well as the Institute for Development Studies (IDS). 'Even if you take three or four per cent returns, we should be getting at least three, four or five, or six billion.' He shared his opinions in a 'Sabah Voices to Action' podcast with former Sabah Law Society President Datuk Roger Chin with Kopi Tiam Council hosts Adi and Haffisz organised by NGO Sabar recently on 'Economic Imperative on Stringent Governance for Sabah's GLCs'. Lo said these GLCs have failed to deliver decent returns from their assets. 5 per cent is acceptable and 10 per cent is considered good. If only the GLCs can generate 5 per cent or better from their assets, the Sabah Government would have several more billions of dividends each year! He said 5 per cent return on assets shouldn't be an issue as the cost of capital assets like land is practically free. Private sector can generate much better than 5 per cent even though they have to pay for land at market prices and to service interest for loans. Compare this to the RM143m the Sabah Government received from the few performing GLCs, of which RM50m was from SMJ Energy. Lo said Johor's KPJ HealthCare Bhd with 43.38 per cent owned by Johor Corp and listed on Bursa Malaysia with a total share value RM1.96 billion, is an example for Sabah's GLCs to emulate. 'KPJ HealthCare Bhd can deliver more dividend than all Sabah's GLCs Profit with more than RM350 million!' Sabah GLCs are also very fond of signing JVs with non-Sabahan companies for whatever reason. 'We need to cultivate homegrown businessmen rather than making or adding money to some non-Sabahan entities instead of within Sabah,' Lo said. 'My point is this, if the GLCs are successful, we could have listed on Bursa Malaysia – we don't need to raise so much government funds. 'Number two, we don't need to depend on the Government budget much. We can raise a lot of money by the billions by going to the market. Datuk Roger Chin said the traditional type of JV is literally over a piece of land. What happens is that the GLC ends up with 10 shoplots as an example. 'If the GLC had developed the prime piece of land, say in Kota Kinabalu, by itself, it would have gotten a lot more money and assets. 'I understand it takes a lot of money to develop the project. The GLC may not have the funds, but funds could have been raised by other ways. 'I have always found it amazing how they can just settle for 10 shoplots. Looking at all the JVs signed, you will realize that is actually like that.' Lo adding to Roger, said: 'If you have a piece of real estate that is very valuable, why does that GLC need to enter into a JV with somebody? They could have easily monetised this. 'You can actually raise funds because you already got a very valuable asset. Why do we need another company in the real estate business to come in? We have a lot of Sabahan developers who can do it. Now why do we need to enter into a JV with these people from outside?' Roger: 'For me, GLCs have a purpose. They are for industries or sectors that no one wanted to go into. Like a milk factory or a cement plant. 'They should only be in sectors where the private sector is not better than them. So they have to grow to be better than the private sector in these industries.' According to Lo, in Sabah two things have been happening for years. 'GLCs are killing the private sector in many areas. 'Our private sector have already been more or less wiped out. Our private sector has no chance to really develop. Worse is that with change of governments, one of the first victims will be the private sector players. 'Oh, you supported the last government so I kill you. Our political leaders they must stop this. 'We cannot have economic growth on a sustainable basis if you keep killing your own Sabahan entrepreneurs. More so, you kill Sabahan entrepreneurs and bring in outsiders. This is very, very serious. The mindset must change. 'Very simply put, if the GLCs belong to the government, then there is clearly a conflict of interest going on. 'The conflict is that I will support the ones that I own. I will give the ones that I own more of a leg up than it should, and therefore making it unfair for the private sector. That's how it distorts the market,' said Roger. 'It is bad because policies will be tailored to favour the GLCs rather than the whole private industry. That's how it distorts the market and the private sector suffers because of that,' Chin explained. He called for a Procurement Act that will be a game changer to equalise the playing field distorted by government's preference or overzealous enforcement of Bumiputra policies. 'Of course, all GLCs can be turned around! Nothing is impossible. All that is needed is political will and political courage. Hajiji (Chief Minister) has started the ball rolling. There are capable Sabahan officers and professionals who can turn around the GLCs!' 'For the first time in Sabah with Hajiji as CM and Masidi as Finance Minister, we have the political courage. The abuses, losses and misgovernance of GLCs have been swept under the carpet for too long. Hajiji has appointed Masidi to be in charge of all GLCs.' 'Sabah Voices to Action - Shaping Sabah's Future Together' is a citizen-driven, non-partisan initiative running from March to June 2025, dedicated to amplifying Sabahans' voices, fostering meaningful discussions, and shaping policies on education, healthcare, public infrastructure, and good governance. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Daily Express
2 days ago
- Business
- Daily Express
Purpose Sabah GLCs set up defeated
Published on: Monday, June 09, 2025 Published on: Mon, Jun 09, 2025 By: David Thien Text Size: Former Sabah Law Society President Datuk Roger Chin (left) and a retired banker Datuk John Lo. Kota Kinabalu: Sabah's Government-linked companies (GLCs) should be profit-centres earning billions in ringgit for Sabah. As economic force multipliers they should be providing high income jobs to thousands of Sabahans as they embark on down-streaming for export. If successful, they could be listed on Bursa Malaysia to raise development funds. Advertisement That was the ideal situation envisioned by former Chief Minister Tan Sri Harris Salleh when he initiated the set-up of many Sabah GLCs during the Berjaya administration. Subsequent Sabah Governments proliferated many more GLCs, with little consideration of their economic purposes or roles. Mostly to give perks to political warlords and cronies. Good governance was thrown out of the window. The result is some 250 GLCs today, most of which are poorly managed and bleeding millions of ringgit. Advertisement The present State Government's placement of more professionals in the management of GLCs in an attempt to reform and turn around loss-making GLCs is in the right direction, according to retired banker Datuk John Lo. He shared his opinions in a 'Sabah Voices to Action' podcast with former Sabah Law Society President Datuk Roger Chin with Kopi Tiam Council hosts Adi and Haffisz organised by NGO Sabar recently on 'Economic Imperative on Stringent Governance for Sabah's GLCs'. 'I always feel we Sabahans are our biggest enemies because people who have been put in trust are not doing their job,' Lo said Harris used GLCs to propel the boom during the Berjaya government, instead of just using government departments. 'One of the main reasons being GLCs are very private sector driven and should be able to help Sabah develop faster. During his (Harris) time, the GLCs generally speaking did a very good job. 'There was a big boom.' Lo, who is an advisor to the State government in his role in the Sabah Economic Advisory Council (SEAC) and in the Institute of Development Studies (IDS). Lo recalled how Harris started a number of GLCs when he became Chief Minister. Harris' intention was that these GLCs would help to expedite the development of Sabah. To a large extent, Harris succeeded. Sabah became No. 2 state in Malaysia, after Selangor. Since he left office, Sabah has become No.2 from the bottom. Some of the GLCs that Harris created include Sabah Gas, Sabah Energy, Sabah Methanol, Asean Supply Base, Sabah Air, Sabah Forest Industries (SFI), Tanjong Aru Beach Hotel or TABH [now Shangri-La Tanjong Aru Resort], Labuan ShipYard, Sabah Hot Briquetted Iron, KPI, SUDC, Sabah Cement Industries. Significantly, Harris also gave birth to three financial institutions – Sabah Development Bank, Sabah Bank and Sabah Finance. Unique because no other state has ever been granted approval for three financial institutions bearing the name of the state. GLCs dominate every important economic sector in Sabah. GLCs are in effective control of many natural resources: mining/minerals [SMM], timber and FMU [Innoprise, Safoda]. 'The GLCs have been given the most valuable lands in Kota Kinabalu. All the commercial lands were given to the GLCs for a mere RM1,000. 'And then they go and JV (joint venture) with somebody and today a particular GLC is insolvent, instead of making billions. The GLCs are in control of a lot of our assets from oil palm plantations which are worth in the billions, with monopolies like Cement Sabah etc. 'Every aspect of our economic life, we have some GLCs involved,' Lo revealed. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Daily Express
22-05-2025
- Politics
- Daily Express
Innocent taxpayers biggest losers in graft
Published on: Thursday, May 22, 2025 Published on: Thu, May 22, 2025 By: David Thien Text Size: (From left) Adi, Michael, Hanafiah and Haffisz. Kota Kinabalu: It is ordinary citizens who end up paying the price for corruption and in the case of the 1MDB which cost the taxpayer RM42b, the impact will last for generations to come. Senior Chartered Accountant Partner at Crowe Horwath, Michael Tong, said 1MDB was also a world record-breaker in public looting. He was speaking at the recent NGO Sabar – Kopitiam Council 'Sabah Voices to Action' Episode 8 podcast recently on Good Governance, Public Fund Leakages & Mismanagement with Permanent Secretary of Sabah Ministry Science, Technology and Innovation, Datuk Mohd Hanafiah Mohd Kassim. The rot starts at the top and the consequences are still felt today. 'Closer to home, our Water Dept scandal uncovered in 2016 revealed senior government officials embezzled over RM60 million which was meant for the rural water supply projects. 'Deep entrenched cartel system collected and distributed to as high as the ministerial level,' he said. Both Michael and Mohd Hanafiah agreed there is a need to check graft that could undermine the progress of the state and steal the future of generations of Sabahans by a corrupt minority in positions to do so.' Advertisement 'The culture of complacency and apathy on graft must go, to be replaced by a culture of accountability and transparency.' People need to be guided, convinced, and educated about the consequences of corruption, and be able to express outrage in disapproval of it and not be apathetic, as Hanafiah puts it: 'Tidak payah lah, ini bukan saya punya hal.' Michael called for the Whistleblower Protection Act to be improved to curb corruption. The Whistleblower Protection Act 2010 was enacted to encourage and facilitate disclosure of improper conduct in both the public and private sectors. Under the Act, the range of protection goes as far as protection of confidential information; immunity from civil and criminal action; and protection from detrimental action. Michael noted that in a recent case the whistleblower became his own victim. He said it is important to forge political will to achieve efficiency and curb wastage by GLCs. Hanafiah said competency is crucial to check graft, with the proper governance and SOPs. It is an ongoing struggle as good and experienced personnel can be retired as time goes. 'All religions teach morality and between right and wrong,' Michael said, 'The shame culture is not there for people who engage in corruption. 'They don't have that dignity and honour to uphold the good name or legacy of their family. The culture of honouring and the culture of being shameful of wrongful conduct is lacking,' Michael noted. AG's report too late Hanafiah noted that at one point in time, the salaries of federal civil servants had not been reviewed for more than a decade. Sabah has one of the highest poverty rates in the country. He once asked the authorities on the people convicted of corruption – only 40 per cent prosecuted were the 'buayas' or big crocodiles, most were the 'kacangs' or (peanuts) or low level offenders. Michael noted that corruption is a long-standing issue due poor governance, lack of transparency, systemic corruption that is practiced and acceptable, and inefficiencies in public administration, insufficient check and balance institutions, poor integrity and moral values. He also said the It was reported reports by the Auditor-Generals came very late. This has not enabled the government to take action against corruption. 'The belated yearly National Audit Dept reports are on government projects at inflated costs like schools, hospitals and public infrastructure. 'Still the worst projects suffered from delays and substandard quality. Sabah's uncompleted Pan Borneo, quite unlike Sarawak's completion rate, is a clear comparison on the efficiency of the Pan Borneo Road project between the two States.' Placing experts in GLCs lauded Michael lauds the state government's recent placement of professionals into the management of some GLCs, noting these professionals would not risk their good reputation in tolerating graft, mismanagement and nepotism abuse which are detrimental to the operational health of these agencies. 'As most of these entities which are not managed by technocrats and professionals but political appointees, business is seldom practised as the corporate objective is to make profit. In some cases resulting in competing unfairly with private entrepreneurs.' He cited the example of MAS requiring multiple restructuring and bailouts with taxpayers' monies due to mismanagement. Michael recalled that in Sabah many industries set up by the Berjaya administration suffered losses and eventually sold off. 'Sabah, despite being resources rich, is one of the poorest states and one wonders how effective are these poverty alleviation programmes where there is criticism for inefficiencies and leakages and where the funds were alleged to have not reached the intended beneficiaries. 'One also needs to question whether the root cause of poverty has been properly addressed, or we are just treating the short-term symptoms especially without really understanding the cause such as the migration of Sabahans to work in West Malaysia because of better employment opportunities.' He noted that the need for a political war chest fund to win elections also contributes to cases of corruption. 'Sabah Voices to Action - Shaping Sabah's Future Together' is a citizen-driven, non-partisan initiative running from March to June 2025, dedicated to amplifying Sabahans' voices, fostering meaningful discussions, and shaping policies on education, healthcare, public infrastructure, and good governance. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Daily Express
21-05-2025
- Business
- Daily Express
Maintenance culture lacking in Sabah
Published on: Wednesday, May 21, 2025 Published on: Wed, May 21, 2025 By: David Thien Text Size: At the podcast session: (From left) Adi, Rizal, Amarjit and Haffisz. Kota Kinabalu: Sabah's only remaining pre-war structures, namely the Tourism Sabah Office and Atkinson Clock Tower bear evidence to the importance of meritocracy and maintenance culture. Nowadays, it is considered good if a modern concrete building can last 50 years. Architect Rizal Ahmad Banjar shared this opinion at a recent NGO Sabar – Kopitiam Council 'Sabah Voices to Action' Episode 6 podcast hosted by talk show stars Adi and Haffisz on 'Infrastructure & Housing: From the Eyes of the Professionals. Rizal said as a professional, this has concerned him very much. Other than adhering to good building standards, a good culture of maintenance is vital for Sabah to ensure that the lifespan of a building can last long. He cited the many great cathedrals of Europe that have lasted for a few centuries as what good and proper maintenance could ensure. 'That's the irony of constructing a building. In Europe, there are cathedrals that can last hundreds of years. Now with all our technology, with all our skills, with all our knowhow, if the building can last for 50 years, it can be considered good. Advertisement 'Planning must involve long-term implementation up to 100 years if possible, to last up to our grandchildren's generation with good and proper maintenance. So that they, our future generations, don't have to spend millions for repairs. 'We should not waste or take up the future of our next generations,' Ar Rizal said. Water industry expert Datuk Ir Ts Dr Amarjit Singh cited the Taj Mahal that lasted hundreds of years in India. He attributed it to master craftsmen who were specialists in their fields of building expertise compared to the situation now that any privileged person who can be a jack of all trades can also pass off as a building contractor, with no qualms to cut corners. Podcast host Haffisz brought up the issue of the 'Alibaba' system with the main contractor getting the bulk of the contract sum, while appointing subcontractors to do the actual work getting the least payment and how to end such dishonest practices. Ar Rizal and Dr Amarjit said it is vital to practise meritocracy in getting the right people in a merit-approach system to do the works responsibly. 'I am a Bumiputra myself. This policy has been manipulated and abused to the extent it has become a commission thing. 'From my experience we know who is doing the work. They are the last ones to get the money. They receive the least money. Sometimes they don't receive at all. That's the worst.' Datuk Ir Ts Dr Amarjit Singh: 'The big companies get the jobs, and still they will get subcontractors to do the work. Why don't the Government instead give it directly to the subcontractor level. 'When the Bumiputra ideology came it slowly diminished the opportunities for others, non-Bumiputras. We call ourselves Malaysians, but are we actually equally treated? That's another question.' Dr Amarjit said the contractors doing water treatment plants and other projects were largely the non-Bumiputras and some Westerners. Ar Rizal said most main contractors have not been helpful in preventing delays and the need for extension of time after marking up the subcontractors' contract sum, sometimes by 30 per cent. The subcontractors don't mark up their prices if awarded directly. He said if the system is reversed, 'You are in a win-win situation, you get good works and completion in time. 'What the subcontractors don't have is the so called Bumiputra status, the so-called connections and so-called licensing. 'What we want is their specialist skills with a priority to complete the project. Ar Rizal said having supervised thousands of big and small projects, all faced delays. He is a local Bumiputra and believes Bumiputras should be helped. However, there should be merit in ensuring that the right and qualified people get to do the work. Ar Rizal suggested that project works be awarded to the people who actually do the job whereby the subcontractors be given the job with the appropriate contract sum. 'I am sure you have noticed that students after they have finished SPM or STPM. The Nons don't have many opportunities to get either scholarship or go for matriculations to further their studies.' He hoped that in Malaysia, things are changing for the better with the younger generations. 'Infrastructure development involves maintenance. You can build the best infrastructure, but if you do not maintain it, the infrastructure will deteriorate over time.' Sabah has to produce more professionals in the fields that the State plans to excel in, Dr Amarjit said. Planning is one matter and implementation is another vital factor. 'We need to have the right people doing the right things as in meritocracy,' he said. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Daily Express
13-05-2025
- Business
- Daily Express
Cartel factor in Sabah projects
Published on: Tuesday, May 13, 2025 Published on: Tue, May 13, 2025 By: David Thien Text Size: From left – Adi, Ar. Rizal, Dr Amarjit and Haffisz. Kota Kinabalu: The involvement of project cartels in many big construction projects in Sabah has led to numerous problems for local professionals and contractors. Such projects were actually not done by the people who are supposed to do it. The presence of these cartels, which have good political connections and are very well-versed in how to get project tenders in the federal capital, has worsened the construction situation. This was revealed by architect Ar. Rizal Ahmad Banjar at the recent NGO Sabar – Kopitiam Council 'Sabah Voices to Action' Episode 6 podcast recently hosted by talk show stars Adi and Haffisz on 'Infrastructure & Housing: From the Eyes of the Professionals' with water industry supply resource expert Datuk Ir. Ts. Dr Amarjit Singh. According to Ar. Rizal, monopolistic construction cartels are affecting local contractors and professionals as they corner government construction contracts from A to Z impacting the proper implementation of major projects with funds flowing outside Sabah and which do not trickle back to Sabah. 'That's the sad part of it,' Ar. Rizal said, stressing that such systemic monopoly does not help to build up local contractors and professionals as they get peanuts in income profit, 'or don't get at all.' Ar. Rizal said at the end of it, 'We are not getting what we are supposed to get.' This led to a situation where the local contractors and professionals have little financial resources to build up their capacity to compete with the bigger competition from elsewhere. Datuk Ir. Ts. Dr Amarjit said ultimately, 'Vitamin M, the dollars and cents matter. If you have enough resources, if you have enough financial aid, anything can be built in Sabah. Even a nuclear power station.' Dr Amarjit agreed with Ar. Rizal that project contracts should be awarded to people who do the actual work. 'We are giving the work not to the right persons. We need to have the right people doing the right things, as in a meritocracy.' He believes that funding being an issue is hampering the current infrastructure development, saying that having lived in Kuala Lumpur, there are multi-storey flyovers up to three to four levels but here in Sabah it is only at one level. 'So, all the monies need to be brought back to develop our state.' 'We will always need professionals. There will never be enough professionals in Sabah,' he said, adding that if in the case of Sabah, aiming to go into electronics export, then there is a need for more electronic engineers as an example. 'Anybody can become a contractor nowadays. Anybody can do any work nowadays. If you go back 40 or 50 years, for example, if you are a musician, I will only hire you as a musician, I will not ask you to do any cooking for me. 'Now, as we progress, we have this philosophy of 'semua boleh'. You don't get the road engineer to do water works,' Dr Amajit opined. He said in Sabah, the water system comes in three phases. 'The first phase is the production. Next you have the operation, and last you have the billing. Production is where you have the structure where your infrastructure sits.' 'They operate, produce water. Then water is channelled and is purveyed to customers and you people are all billed. I hope you pay your bills in order to have the production, you need the source. 'Sources in Malaysia actually 95 per cent comes from the rivers. Sabah's context, yes, 95 per cent comes from rivers. 'We only have six dams in Sabah. The famous is the Babagon Dam in Penampang. There is one off river storage near the Talibong 2 treatment plant.' He noted that there were a lot of objections by people including university professors, on building dams like the proposed Papar dam and before that was the Kaiduan dam. 'Villagers unwilling to lose their heritage lands which will be inundated in the waters of the dams. So, dams off river and in the sea may be the alternative. Dr Amajit said when he was in primary school, he learnt that Sabah was not affected by earthquakes, which now is considered prone to earthquakes which may impact dams in certain locations. 'The issue is whether we have enough source, or whether we have enough infrastructure, or whether we have enough pipelines, and last but not least is the billing. 'NRW, the definition of Non-Revenue Water is whatever is actually produced and whatever is billed. You minus these two and you divide by what is produced. In Sabah, the NRW is more than 60 per cent,' Dr Amarjit said. Ar. Rizal called for a sustainable rainwater harvesting system and a big central water tank storage system for every housing estate to be provided by the property developer with incentives to be provided by the government to complement the public water supply system. Dr Amarjit said in every housing estate in Kuala Lumpur, there is such a big balancing tank or whatever you want to call it to complement the public water supply system. He called for such a system to be implemented in Sabah. He revealed that the largest water treatment plant in Sabah is only having a capacity of 180 million litres a day. Dr Amarjit said in the case of the Selangor water supply authority, the first water treatment plant was 900 million litres a day. The second one was 950 million litres a day. The third one was 800 million litres a day. 'But in Sabah we go for small-scale development.' 'We are always trying to promote enough storage. Rather than building upstream dams, why don't we build water dams in the sea? 'China has done it to serve a population of about 12 million. Whenever we have additional rainfall – 2500 mm per year flowing into the river to the sea. Why don't we tap it just before it enters the sea?' Dr Amarjit opined that illegal tapping is not the main cause of NRW. * Follow us on Instagram and join our Telegram and/or WhatsApp channel(s) for the latest news you don't want to miss. * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
