Universiti Malaya professor Terence Gomez told FMT that the sectors were highly competitive due to the presence of many local and foreign players.

“There is no need for the government to be involved in these sectors as they are not strategically important sectors like energy and food supply,” he said.

He acknowledged that allowing full privatisation of these sectors in which there are monopolies could affect the lives of the people as the government would not be able to decide on the charges levelled on individuals and businesses.

“But with construction, there is no monopoly, so if we promote competition it will help drive prices down.”

He said divesting from construction-related GLCs would be easier and more logical than divesting from companies like Tenaga Nasional Bhd and Bernas.

He added that heavy government involvement in the sector could be abused for patronage politics, referring to the Barisan Nasional era in which politicians and politically-linked figures had a presence in construction-related GLCs.

This was also evident in the awarding of big contracts to GLCs, which then benefited from mega projects, he said.

“This was a pervasive practice within the then-dominant Umno, where the distribution of contracts was a mechanism by which party leaders secured the support of grassroots members.

“This form of patronage was justified on grounds that it was to fulfil Malaysia’s ethnically-based affirmative action policy.”

According to the Institute for Democracy and Economic Affairs (IDEAS) Malaysia GLC Monitor 2018 report authored by Gomez, the government has a significant direct equity interest in numerous GLCs, all of which are owned by federal-level institutions.

These include the Employees Provident Fund, Retirement Fund Inc, Khazanah Nasional, Permodalan Nasional Bhd and the Armed Forces Fund Board, which acquired their shares from private funds.

According to the report, major construction-related GLCs include Gamuda Bhd and IJM Corporation Bhd, where about 40% of the shares are held by government institutions.

Others include SP Setia and UEM Sunrise, in which government institutions hold around 70% of the shares.

Property expert Ernest Cheong supported Gomez’s call for Putrajaya to divest from its property and construction-related GLCs.

He said GLCs had no business being in the sectors as they were open to political interference, which was not ideal given that the sector is a high-risk one.

“The property and construction sectors are best left to the private sector. Let them take the risks and if they profit, they pay taxes to the government,” said Cheong, a chartered property surveyor.

“I’ve been in this industry for 40 years, and even today, many experienced developers are losing money due to challenges in the market,” he said, adding that the government should not be in the business of taking risks, but rather governing and looking after the people.

Sunway University Business School economist Yeah Kim Leng meanwhile said the mandate of providing affordable homes could be seen as “appropriate” for GLCs, particularly those with suitable land banks.

“Given the under-provision of affordable housing, there is a role for selected GLCs to develop capabilities and spearhead industrialised building systems in meeting the country’s pressing need for more affordable houses in the below RM150,000 category,” he said.