Datuk Seri Hajiji Noor is the first Chief Minister to recognize that Sabah’s economy can’t be transformed/restructured without a thorough GLC transformation.
Most importantly, he acted on it. The most distinctive characterization of Hajiji as the “first CM” to seek a truly comprehensive transformation of Sabah’s GLCs stems from a shift in strategy: moving away from ad-hoc, cosmetic restructuring to a centralized, system-wide governance model.
Central to Hajiji’s model are:
[1] In-depth transformation of direction, system, governance, monitoring and KPIs. Hajiji has given hardcore underperformer GLCs 5 years to turnaround or face closure.
[2] Key appointments of well qualified professionals in senior management positions.
While previous administrations often rebranded GLCs or replaced boards following election cycles, such actions are only “skin deep” like a doctor’s prescription of Panadol for cancer.
2. GLC problem is massive. Sabah can’t progress without comprehensively revamping GLCs.
This is one of the most under-estimated economic facing Sabah, often underestimated by Sabahans, especially politicians.
Best summary of the GLC problems:
[1] Mother of all problems.
[2] 90% of more than 260 of GLCs are losing money or have failed to deliver their intended social objectives.
[3] Total staff employed is estimated to be more than 15,000. This is about 75% of Sabah’s civil service. One estimate is that this number may reach 20,000. This is almost the same as the whole of Sabah’s civil service.
[4] Total estimated assets of all GLCs is estimated between RM15 billion to RM25 billion. This can be substantially larger if full valuation of all monopolies and “sweetheart” concessions from the Sabah government are taken into account.
[5] Non-performing GLCs are massively blocking Sabah’s economic progress. These GLCs are in every major economic sector with monopolies/ “darling” concessions in valuable/prime lands at RM1000 premium each from Sabah government. But most of them have failed to deliver.
[6] Some GLCs have incurred massive debts, signed lopsided JV agreements. These are massive burdens for the government.
[7] Most of the failed or delayed projects in KK are JVs by GLCs with Malayan companies.
[8] Some of the performing GLCs are far below to their counter parts in the private sectors in their performance.
Such a situation would never be tolerated in the private sectors. The chairmen, directors and senior management would have been sacked long ago.
3. Don’t fall for false prophets. Too many in Sabah.
Over the years, many false prophets have come to Sabah to seek fortune, fame and titles. These false prophets can be detected quite easily in their mannerism:
[1] They talk loud, they talk fast, they want to impress. They talk non-stop. They claim to know all. Behind this façade is scanty substance. They have little respect for Sabahan officials. They shout their “advice” from A to Z like hawkers in their night market wisdom.
[2] Some have very limited experience, confined to one job or one employer. Have held middle rank jobs only. Never in top management or Directorship in a corporate board. Have never been appointed a board director of any GLC or turned around any underperforming GLC.
[3] Details from due diligence will show their shallowness in experience and knowledge in either high level corporate position, turn around companies or high-level policies.
[4] Such false prophets are good at worming their ways to position of influence.
[5] Sabah’s GLCs cover a very wide spectrum of business activities. Transformation of Sabah’s under-performing GLCs will require high level experts in many fields.
[6] Sabah’s GLCs must undergo a massive rationalization. No room for these false prophets.
[7] Transforming Sabah’s GLCs is very complex. It will require inputs and directions from senior officials like SUT Sofian of MOF, Director Jasmine of EPU and private sector working closely to produce macro and micro policies, systems, their implementations and monitoring. All these needs brains from a variety of experts.
[8] Most false prophets are ignorant of macro and micro policies for transforming Sabah’s GLCs.
Beware: These false prophets, if their advice is accepted, may create a bigger hole than the existing one, like jumping from the frying pan into the fire.
4. Hajiji has made impressive progress in turning around the GLCs.
Since Hajiji has put his foot down, a few GLCs have shown impressive performance. The details are available in the public domain.
5. Hajiji’s transformation will create major economic contributors out of GLCs.
Hajiji’s wish to transform the GLCs is grounded on solid economic reasons.
[1] Foremost, turning around the under performing GLCs will rid them from financial support year in and year out. Money saved can be used to eradicate poverty.
[2] The 15,000 or more employees will be gainfully employed; their productivity will improve. With better performance and/or profit, their income will increase. This will be good for their families.
[3] Hajiji has entrusted some young Sabahans who have succeeded in turning around some GLCs already. This must continue so that Sabah will have groomed a group of young capable Sabahans. This is the way to go for our future.
[4] If Sabah can transform the GLCs soon, Sabah will stand out as a progressive state, outsmarting Malaya which have a frightening number of badly managed GLCs at the federal and state level.
6. What are Hajiji’s efforts in transforming GLCs in potential $ and c for Sabahans?
Very simple calculation. GLCs’ dividend to Sabah government in 2025 is RM131. 6 million, most of which is from SMJ Energy. Tiny sum compared to potentials.
The GLCs’ total asset is estimated at RM15 billion to RM25 billions.
Here is the table showing the potential dividends of Hajiji’s efforts
Hajiji wanting to transform the GLCs makes excellent economic sense. It is achievable.
The above table shows
[1] Present dividends from GLCs is well below satisfaction.
[2] There is huge rewards for Sabah for GLCs to improve their performance.
Dividends benchmark: Average 3% to 4%. Good:5% to 6%. Excellent: 7% upwards.
7. Hajiji’s Transforming GLCs can yield extremely attractive returns. But it will require very extensive hard work, political courage and difficult/complex decisions. Even in the private sector, transforming all these GLCs will require unimaginable efforts and resources. In the world of government and politics, this job can be 100 times more complex.
Is it any wonder that there has been no serious attempt to transform the GLCs in a holistic manner until now!
