THE Penang government is stepping up efforts to strengthen governance and accountability among its government-linked companies (GLCs), with a focus on improving operational efficiency and aligning their functions with the state’s socioeconomic priorities.
The efforts include consolidating 18 GLCs into 11 strategic clusters, reviewing their corporate structures and strengthening InvestPenang’s financial monitoring, reporting procedures and internal controls.
Chief Minister Chow Kon Yeow said the restructuring was aimed at streamlining GLC operations, reducing overlapping functions and ensuring better alignment with the state’s development priorities.
“This initiative aims to reduce functional overlaps, optimise operating costs, and align mandates with the state’s socioeconomic priorities.
“Engagement sessions with all GLCs were concluded last October, while the study report is scheduled for presentation this December, with finalisation expected by February 2027,” Chow (PH-Padang Kota) said during his winding-up speech at the Penang State Legislative Assembly sitting today.
Meanwhile, between 2021 and 2024, InvestPenang received RM14.46 million in operating grants and recorded RM15.05 million in expenditure, with the RM590,000 shortfall covered by accumulated grant balances, leaving RM1.19 million at the end of 2024.
Chow clarified that the expenditure was supported by previously accumulated grant balances, while audit reports had assessed the company’s financial position as stable.
“All expenditures were based on annual budgets approved by the Board of Directors, and audit reports have assessed the company’s financial position as stable,” he said.
On the broader evaluation of GLC performance, Chow said the state government considers both financial returns and social contributions, rather than focusing solely on profitability.
“It balances Return on Investment (ROI) with Return of Value (RoV), which encompasses social value returns such as job creation, skills enhancement for the public, the empowerment of entrepreneurs, and societal well-being — all measured against quantifiable KPIs,” he said.
On another matter, Chow clarified the rationale behind converting PDC’s RM70 million loan for the Global Business Services (GBS) By The Sea project into a grant, stressing that the decision was part of a broader financial restructuring exercise rather than a free handout.
Under the arrangement, the state government will no longer need to disburse the remaining RM30 million loan balance to PDC, while PDC will contribute RM84.87 million in outstanding approval fees to the state government.
The funds will be used to finance industrial development projects and meet the requirements of state-owned companies.
“This conversion does not constitute a ‘free handout.’ Rather, this decision is part of a carefully structured realignment of financing methods and the management of financial commitments between the state government and the PDC.
“Through this adjustment, the state government is also no longer required to disburse the remaining loan balance of RM30 million, which had not yet been released to the PDC,” Chow said.
He added that the RM84.87 million contribution would help support the state’s industrial development initiatives and the financial requirements of its state-owned companies.
“This adjustment also entails the contribution of the remaining balance of approval fees collected by the PDC amounting to RM84.87 million to the state government, to be used for financing industrial development projects and meeting the requirements of state government-owned companies,” he said.
Story by Ammar Mikhail Aamer