Sarawak government to stop funding GLCs from 2027, encouraged to seek own revenue

KUCHING: The Sarawak government will no longer give funding to government-linked companies (GLCs) from 2027, says Tan Sri Abang Johari Openg.

The Premier said this move would start with the Sarawak Economic Development Corporation (SEDC) and Bintulu Development Authority (BDA), with the savings to be channelled to infrastructure development.

"We (currently) give a budget to GLCs and statutory bodies.

"What we want now is for them to find their own revenue, because some of their subsidiaries are involved in commerce," he told reporters after opening the National Auditors Conference here on Tuesday (June 25).

For instance, Abang Johari said GLC subsidiaries involved in palm oil could expand their revenue by exploring new products and innovations such as waste-to-energy.

"That's where they can get new revenue streams which they can give to the main statutory body, so the government doesn't need to give them money," he said.

He added that it was important for GLCs to change their mindset of depending on the government for funding.

"Otherwise they will think it doesn't matter if they make losses since the government will give them money. The culture has to be changed.

"They must work hard to find revenue," he said.

Abang Johari said the state government would use the savings to implement basic infrastructure projects like schools and clinics, which in turn would benefit the people.

He declined to say how much savings the government expects from the move.

"The budget allocated for them will become savings. Say we give everyone RM500mil, we will save RM500mil," he said.

Abang Johari also said SEDC and BDA were selected first for the move because of their potential to make investments and earn revenue.

He said SEDC had a stake in a methanol project while BDA could invest in industries at the Samalaju Industrial Park.

"I am confident that they can stand on their own," he said.

In his speech earlier, Abang Johari said the move to stop funding GLCs was aimed at achieving lean management and strengthening their financial position.

He said GLCs should explore sectors that would give them good returns.

"With this approach, both the GLCs and the government will have a strong financial position," he said.