End of indulgence – Sabah’s GLCs enter accountability era

Every so often, a moment cuts through the familiar hum of governance — when polite encouragement gives way to unvarnished truth. Last week, in his address to the leadership of Sabah’s government-linked companies (GLCs), Chief Minister Datuk Seri Hajiji Noor delivered precisely at such a moment. Listening to his remarks, I was reminded less of a political speech and more of a stern university lecture: discipline, planning, and accountability are not optional extras.

They are the foundations upon which serious institutions are built.

The message was unmistakable. The era of indulgence is ending. Government support is not a permanent safety net; it is public capital, held in trust for the people of Sabah. And capital entrusted carries an obligation — to perform. This was not a philosophical debate. It was an operational directive: deliver results or make way.

In logistics, underperforming assets are either fixed or removed. Yet for years, Sabah’s GLC ecosystem treated the principle of “perform or perish” as theory rather than discipline. An unspoken assumption crept in — that survival itself equaled success, and continuity alone was an achievement. Losses were tolerated. Mediocrity became normalized. Explanations replaced outcomes. Narratives substituted for results. No serious system can function that way for long.

In my world of logistics, the rule is far simpler. When cargo stops moving for an extended period, something is fundamentally wrong. You can blame the weather, paperwork, labour shortages, or global trends — but if five years pass and nothing shifts, the problem is no longer external. It is structural, internal, and self-inflicted.

That is why the Chief Minister’s warning — that GLCs failing to generate earnings for five consecutive years may face shutdown — resonates far beyond balance sheets. It signals that Sabah is finally prepared to treat chronic underperformance the way any serious operator would treat a dead terminal: with facts, timelines, and consequences.

The stakes are public and profound. Every ringgit trapped in a loss-making GLC is a ringgit not invested in roads, ports, schools, or hospitals. In logistics terms, it is dead inventory — occupying space, tying up capital, and yielding no return.

But let us also be clear: shutting down a terminal is not a strategy. It is an admission of prolonged failure. Companies do not collapse overnight; they decay gradually —  through  underutilized assets, deferred maintenance, postponed decisions, and blurred accountability. In many Sabah GLCs, underperformance has been years in the making, enabled by weak governance, unclear mandates, and a culture that at times prized loyalty over competence.

If reform is to be credible, accountability must be honest and historical, not selective. It would be unjust to pin systemic failures on current management alone when those failures were embedded long before they arrived. You do not blame a crane operator for a master plan that was never properly funded or executed.
Credit is due to both the Chief Minister and Finance Minister Datuk Seri Panglima Masidi Manjun for reaffirming the long-standing requirement of a minimum 10% dividend from profits. For mature and profitable GLCs, this is a welcome marker of fiscal discipline. But dividends, like throughput in a port, are outcomes — not standalone objectives.

For capital-intensive or growth-phase entities, forcing payouts at the expense of reinvestment is self-defeating. A port that drains cash without upgrading equipment, systems, or capacity soon becomes obsolete. The same logic applies to GLCs in renewable energy, digital infrastructure, or other strategic sectors. Be warned … discipline must guide decisions — but it must never harden into dogma.

The real battleground for reform lies in the boardroom. In governance terms, the board is the control tower. If it is poorly staffed, no amount of operational effort on the ground can correct the course. While board renewal is necessary, changing faces without raising standards is merely cosmetic.

Chronic underperformance in many Sabah GLCs has been sustained by weak boards — where seats are treated as rewards rather than responsibilities — blurred mandates that demand both commercial returns and social outcomes, and political interference that values loyalty over competence. When the control tower malfunctions, the entire system is at risk.

Reform must therefore begin with competency-driven appointments. Industry knowledge, independence of mind, and the courage to challenge management are not optional attributes; they define the role. At the same time, reckless leadership churn can be just as damaging as stagnation. What Sabah needs is stability with accountability, not a game of musical chairs.

The strengthening of central oversight, with quarterly reporting directly to the Chief Minister, is a constructive step. It removes deniability and forces problems into the open. But political oversight cannot substitute indefinitely for institutional strength. No leader can micro-manage dozens of enterprises forever.

Sustainable reform depends on robust internal systems, independent boards, credible audits, and professional management.

It must also be said plainly: Sabah’s GLCs are not in freefall. The contributions of RM131.6 million are not insignificant. But the decline from recent peaks is a warning light, not comfort. Mediocre performance, left unchallenged, hardens into permanent underperformance.

Sabah’s ambitions in sectors such as AI and green energy are forward-looking and necessary. Yet logistics teaches a sober lesson: new routes require feasibility, capable partners, and phased execution. Prestige projects launched without capacity destroy scarce capital.

Above all, integrity is not a slogan — it is the foundation layer. Strengthening integrity units is not bureaucratic housekeeping; it is risk management. No restructuring survives if procurement leaks, conflicts of interest fester, or controls are ignored. Corrosion begins invisibly; by the time it is visible, the damage is extensive and costly.

The Chief Minister has drawn a firm line. Tolerance for chronic failure has expired. This is a necessary and courageous correction. But credibility will not be earned through speeches or cheque presentations. It will be earned through consistency. Who is held to account? Who is protected? Which entities are restructured or closed — and on what clear, transparent grounds?

In logistics, trust is built when rules are applied fairly, repeatedly, and without exception. Sabah’s GLC reform will succeed only if disciplined systems replace personal discretion, and strong institutions outlast any individual.

When cargo flows smoothly, few notice the machinery behind it. When it doesn’t, everyone pays the price. Sabah’s public enterprises are now at that critical junction. This time, delay is no longer an option. The real test is whether we have the resolve to keep the cargo — and Sabah’s future — moving.