DATUK John Lo in his recent well written articles every Sunday singled out the weakness of government undertakings and administration. Two articles were on the 350 Sabah Government Linked Companies.
In the first place it is too many for Sabah State. Selangor is reported to only have about 60 GLCs that claim to make a profit. Unfortunately, it is merely profits, not real performance of assets against earnings.
Just take for example Sawit Kinabalu, which was part of the Sabah Land Development Board, which Usno and Berjaya Government had allocated about 200,000 hectares of choice land.
Sabah Land Development Board Plantations was divided into two entities. Sawit Kinabalu was allocated the fully developed oil palm plantation having 70,000 hectares.
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The rest remained under Sabah Land Development Board. These were originally for landless Sabahans to settle on 7 hectares having fully planted with oil palm including a settler’s house, with water and electricity supply.
Based on prevailing operating profits or surplus, Sawit Kinabalu should have a yearly profit (surplus) of RM350 million. However, it is reported from time to time that it makes less than RM200 million annually.
Oil palm plantations in Sabah belonging to the likes of Teck Guan or IOI, make at least RM5,000 per hectare. This is based on FFB price of around RM450 per ton.
These figures highlight that Sawit Kinabalu is only making around 50pc of its potential profits from its 70,000 hectares.
There is talk of mismanagement and buying of low quality fertiliser and so on, as reasons for the low profit. Millions of ringgit in fertiliser purchase were also reportedly misappropriated by the top management
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This year (2021) Palm oil prices jumped by 40pc. Sawit Kinabalu should be making at least RM500 million. If less than that the authorities should investigate.
The reason for Sabah having 350 GLCs is so the Sabah Government can provide “JOBS” for its supporters and mostly YBs and Divisional Party Heads.
The allowance for Chairman and Board Members of GLC amount to between RM5 to 10 million yearly just for one. This amounts to over a billion ringgit a year. A lot of wastage considering the funds should be diverted to Rural Economic Developments.
Since this is the culture in Malaysia, which is difficult to get rid of, and in order to reduce the number of GLCs and to create additional income or allowance particularly for the 79 Yang Berhormats, the State Government could, instead, increase the allowances of these YBs to RM36,000 per month.
In addition, bonuses of the YB of say RM3 million on completion of one term.
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This means that YBs completing one term will get a bonus of RM3 million, two terms RM6 million. These YBs can then focus on the job at hand instead of seeking contracts or favours. This will reduce abuses and will work out much cheaper than having to finance 350 GLCs.
I am glad that the current GRS administration is finally doing something about it, which the previous Barisan Nasional and Warisan administration did not have the courage to do so.