ASEAN KEY DESTINATIONS
Malaysia: GLCs better equipped to weather slowdown
While government-linked companies (GLCs) are expected to feel the brunt of the current economic climate, they are better equipped to weather conditions than they were in the past, the Edge daily quoted the state investment firm Khazanah Nasional Bhd as saying Friday.
“Our companies have to brace themselves for multiple effects from the global slowdown. Many of our companies have been affected by the rising prices,” Khazanah Nasional Bhd managing director Tan Sri Azman Mohktar told reporters on the sidelines of the Corporate Responsibility Roundtable 2008 in Petaling Jaya on July 25.
“The key is how GLCs can remain sustainable. We have a 10-year (GLC transformation) programme, so it is reasonable to expect trying times,” he said, adding that GLCs today were stronger than they were in the years past.
Azman pointed out that among the consumer-related companies affected by rising prices were power producers Tenaga Nasional Bhd and companies involved in mobile operations.
When asked about the status of Tenaga's negotiations with the independent power producers, Azman said that there was a need to review the utility industry to address any inefficiency or structural problems.
He added that the industry should be able to make reasonable returns and remain sustainable. “From a standpoint of a major shareholder and government investment arm, we need to get the industry to be sustainable.”
“In the long run, there must be balance in the industry. If there is one part of the industry that is making a lot of money then there are inefficiencies," he said.
In the case of Tenaga, which recently reported reduced third-quarter earnings, Azman said that the company was justified in asking for a higher tariff as it had improved its level of service. He added that while Tenaga had raised electricity tariff prices, 60% of the Malaysian public had not been affected by the increase.
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