PETALING JAYA: A co-founder of the Group of 25 former top civil servants (G25) has proposed the setting up of a parliamentary select committee to discuss the future of government-linked companies (GLC), and the closing of those that are redundant or unviable.
Tan Sri Mohd Sheriff Kassim said many of the GLC owned by state governments were not self-financing and when they operate in the commercial sector with state funding, they are not being fair to private sector companies which have to borrow from banks at commercial interest rates.
“This is one of the biggest complaints that the chambers of commerce raise when they have discussions with government officials about the New Economic Policy and its effects on the economy.
“Such GLC should be closed down because they are not only competing unfairly in the marketplace but are also a burden to state governments because they have to rely on the state government budget to survive,” said Mohd Sheriff, who is a former Treasury secretary-general.
He said it was unfortunate that states find their statutory bodies and GLC important to award projects and board appointments to their political associates.
He added that there should be a full parliamentary briefing on off-budget agencies as they constitute a large part of the public sector and account for huge portion of the federal government debt obligations.
The social activist pointed out that such agencies were established a long time ago to convert revenue-generating sectors such as railway services, ports, electricity and telecommunications into commercially-run enterprises so that they could be independent of the government in their operations.
“If their internal resources were insufficient to finance their capital investments, they had to raise bank loans themselves without a Finance Ministry guarantee, if possible. They are self-governed by their boards, much like those in the UK after the British government corporatised and privatised coal mines, British Airways and others.
“Malaysia drew much of the inspiration for privatisation from the British experience. In America, all public utilities are commercially run.”
He said Malaysia does not need a second national wealth fund as Khazanah Nasional is sufficient, as countries like Norway and Singapore have only one such fund.
Mohd Sheriff added that the country does not need so many GLC, while well-run government-linked investment companies (GLIC) like Khazanah and Petronas should remain as their big holdings are of strategic importance to the country.
However, he said their non-strategic holdings should be treated as commercial holdings for divestment when they can be profitably sold to the right bidders.
