Penang GLCs are social enterprises, not profit centres, says CM

GEORGE TOWN: Penang Chief Minister Chow Kon Yeow says the state’s government-linked companies (GLCs) should not be seen as firms out to make profits.

They should be viewed as a social enterprise aimed at enhancing the development of the state and the lives of the people, he said.

“You must remember this is not your typical GLC that you know. It is a social enterprise, its work is not profit based but it has a multiplier effect on the state’s economy.”

Chow said the impression that state GLCs were profit based was inaccurate as they were “cost centres” – bodies that were funded by the state – as opposed to “profit centres”.

“Therefore, yearly operational grants are given to enable these state GLCs to operate and achieve their mission.

“These so-called state GLCs were formed principally to help formulate state policies and implement community engagement and run programmes in line with the state’s aspirations and future direction.

“It is important to note while we spend little, the outcome is impactful, some agencies are social enterprises and achieve social objectives and advance environmental awareness,” Chow said in a texted reply to FMT.

He was responding to political economy professor Edmund Terence Gomez who had called for the full list of state GLCs to be revealed, not just the 11 revealed at the state assembly.

At the same time, Gomez had also praised Chow for being the first chief minister in the last decade willing to be more transparent about his state’s GLCs.

Chow explained that the other GLCs, which were not named at the state legislative assembly, were formed under the auspices of state statutory bodies which report directly to the state financial officer.

He said what needed to be understood was that the 11 state GLCs were mostly facilitators which acted to get more investments and to boost existing industries such as tourism.

Yesterday, Chow revealed that state GLCs were an engine of growth for Penang in the past 10 years, during a time when federal agencies had shunned the opposition-held Penang.

Chow had previously said he would consider making state GLC’s financials public at the state assembly as a form of notification, although they are technically defined as companies and there is no need to disclose their positions.

In his winding-up speech at the assembly yesterday, the Padang Kota assemblyman assured that his government would go through the finances of the state GLCs with a fine tooth comb and hold them to account.

“We give them yearly grants and we have been watching them closely all along. At the same time we will look closer to cut any waste of money,” he said.

The 11 state GLCs announced by Chow and their respective allocations by the Penang government from 2016 to September this year are as follows:

1. Penang Global Tourism Sdn Bhd (RM23.08 million).

2. George Town World Heritage Incorporated (RM13.74 million). The George Town Festival received an additional RM13 million.

3. Penang Institute (RM12.82 million).

4. Penang Green Council (RM4.5 million). An extra RM2.19 million went to the Green Oasis Environmental Learning Centre.

5. Penang Hindu Endowments Board (RM3.84 million).

6. Penang International Convention and Exhibition Bureau (RM3.6 million).

7. Penang Youth Development Corporation (RM3.46 million).

8. Penang Women’s Development Corporation (RM3 million)

9. Yayasan Islam Pulau Pinang (RM2.4 million).

10. PHH Development Sdn Bhd, Halal Hub (RM1.5 million).

11. Institut Integriti Negeri (RM54,300). - FMT