Malaysia will soon unveil initiatives to reform government-linked companies as part of its drive to make the economy more competitive, Prime Minister Abdullah Ahmad Badawi said today.

The government has 'embarked on substantial reform and restructuring of government-linked companies with the aim to make them more performance-driven and commercially focused,' Abdullah told an investment conference.

"New initiatives will be announced soon. Overall, these initiatives should steadily result in the improvement of overall performance of the GLCs (government-linked companies)," he said.

The premier said the changes would improve dealings between GLCs and companies dependent on their services, as well as deliver better shareholder returns.

As part of the restructuring, the government has introduced a system of key performance indicators (KPIs) as well as performance-based pay for the senior management of GLCs, he said.

Abdullah told reporters that the improvements would be in the areas of procurement and governance, but declined to say when they would be announced.

He said the initiatives were to come from a special committee headed by second finance minister Nor Mohamed Yakcop.

"That meeting has been regularly held and has continued to look into whatever aspects of the GLCs that need to be improved," he said.

Key staff remain

However, the prime minister, who has already shaken up the management of GLCs, ruled out more senior staff changes under the reforms.

"What we have in GLCs now, the big ones, are all the new people ... who are very much involved in doing what needs to be done to improve the GLCs. I would expect them to remain and to implement what they are recommending for approval," he said.

The country's move to restructure GLCs and improve their efficiency is part of ongoing efforts by the government to modernise the economy and shift away from being labour and resource-based.

There are 40 listed government companies which make up 34 percent of the total market capitalisation of the local bourse, or a total RM232 billion, according to government figures.