Kuala Lumpur faces fresh political friction after PKR urged Umno leaders to stop misleading the public over rural road project cancellations in Sabah and Sarawak. The dispute centers on financial commitments, procurement procedures, and federal budget allocations for Borneo states.
The clash erupted in the Dewan Rakyat during debates on the Supply Bill 2027. Finance Minister II Datuk Seri Amir Hamzah Azizan reported that national spending is expected to climb from a revised 2026 projection of RM444.1 billion up to RM459.8 billion for 2027, featuring RM376.8 billion designated for operating costs alongside RM83 billion earmarked for development.
According to figures presented by Amir Hamzah, the overall allocation for Sabah and Sarawak is the highest, with Sabah receiving RM18.7 billion and Sarawak securing RM16.2 billion. Sabah’s financial allocation consists of RM7 billion for development, RM8.9 billion for operating expenses, and RM2.8 billion allocated in state government grants. Furthermore, the Madani government elevated Sabah’s interim special grant from RM26.7 million in 2021 to RM1.5 billion, while Sarawak’s grant climbed from RM16 million in 2022 to RM1.5 billion.
Procurement Procedures Under Scrutiny
Despite these funding increases, controversy persists regarding the status of rural development initiatives. Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi previously disclosed in parliament that several rural projects had run into funding hurdles under the Rural and Regional Development Ministry (KKDW). The ministry reportedly made spending commitments exceeding its approved annual allocation for rural road projects.
That disclosure triggered sharp demands for accountability from opposition lawmakers. Datuk Mohd Azis Jamman argued that Sabahans must not bear the consequences of bureaucratic missteps, demanding to know how projects advanced to the issuance of Letters of Acceptance before funding shortfalls surfaced. He warned that cancelling projects post-SST issuance could expose public funds to compensation claims and additional financial liabilities.
Meanwhile, Putatan Umno chief Jeffery Nor Mohamed sought urgent clarity on the conflicting claims, agreeing with Minister in the Prime Minister’s Department (Sabah and Sarawak Affairs) Datuk Mustapha Sakmud that the Treasury Secretary and the Rural Development Ministry Secretary should meet with parliamentarians to provide transparent facts. Mustapha maintained that allegations regarding the cancellation or reduction of funding for rural road projects remained unfounded.
Addressing Regional Development Disparities
Prime Minister Datuk Seri Anwar Ibrahim defended the administration’s record in the Dewan Rakyat, admitting that current development allocations are never enough to cover vast geographical challenges and underdeveloped infrastructure in remote communities. Anwar stressed that good governance is vital to prevent leakages and avoid indiscriminate contract awards.
The debate also touched on opposition-held territories. Anwar noted that federal allocations for PAS-led Terengganu increased to RM8.2 billion for 2027, up from RM6 billion in 2022 when Perikatan Nasional was part of the Federal Government, refuting claims that the administration acts cruelly toward opposition regions.
| State / Region | 2027 Allocation / Grant Details | Key Financial Comparison |
|---|---|---|
| Sabah | RM18.7 billion total (RM8.9B operating, RM7B development, RM2.8B grants) | Interim special grant increased from RM26.7 million (2021) to RM1.5 billion |
| Sarawak | RM16.2 billion total allocation | Interim special grant increased from RM16 million (2022) to RM1.5 billion |
| Terengganu | RM8.2 billion total federal allocation | Increased from RM6 billion in 2022 under Perikatan Nasional |
As negotiations continue to finalize a fair and sustainable calculation method for special grants under the Constitution, federal authorities face mounting pressure to reconcile ministerial spending limits with on-the-ground rural infrastructure demands.
