Are government‐linked construction companies in Malaysia still valid? The indigenous contractors' perspective

Abstract

Despite privatization, many government‐linked companies (GLCs) still continue to operate in Malaysia. Many have objectives that include the redressing of ethnic economic imbalance. Government‐linked construction companies (GLCCs) were created within these larger public groups. A study was conducted to explore whether the GLCCs are still valid in Malaysia's present construction industry scenario, and if not, what actions should be taken in respect of them. Four aspects (i.e. social obligation, competitiveness, efficiency and income generation) were looked into. To answer the research questions, the viewpoints of ‘A’ Class bumiputera contractors were solicited which were then investigated on four GLCCs, three belonging to state economic development corporations (SEDCs) and one to a land development agency (LDA). The exploratory study found that three case study GLCCs have limited public value. This paper concludes by recommending changes that should be made to them. There is much that policy makers in developing countries with GLCCs can learn from the Malaysian experience. At the very least, it underscores the need to assess their raison d'être periodically. This study also hopes to encourage other scholars to look into a much under‐researched area—that of a particular set of actors commonly created to promote local construction industry development.