Budget 2027: Sabah, Sarawak hopes to increase development allocations

KUALA LUMPUR, 14 Oct: Increased interim special grants to Sabah and Sarawak as well as larger development allocations open up space for strengthening the development of both states, with Parliamentarians hoping that efforts will be accompanied by the finalization of the special grant formula and more effective project implementation.

Datuk Seri Doris Sophia Brodi (GPS-Sri Aman) when discussing the 2027 Supply (Bilan) Bill at the legislative level in the Lok Sabha on Tuesday said an increase in the interim special grant rate for both states from RM600 million to RM1.5 billion through Budget 2027 is worth appreciating.

However, he expects the Federal Government to accelerate the implementation of a clear, objective and sustainable final formula under Article 112D of the Federal Constitution as well as in line with the spirit of the 1963 Malaysia Agreement (MA63).

Datuk Mohd Kurniawan Naim Moktar (BN-Kinabatangan) also asked the government to clarify the current status of negotiations on Sabah's rights formula for receiving 40 percent of net proceeds from the state.

"This issue is not merely a matter of additional allocations, but involves constitutional responsibilities and fiscal relations between the Federal Government and the Sabah government.

"In this regard, I ask the government to clarify the current status of the 40 percent formula negotiations, the methodology for verifying the Federal net income obtained from Sabah as well as the target timeline for reaching a joint settlement with the state government", he said.

Meanwhile, Datuk Wetrom Bahanda (KDM-Marudu City) proposed that the remaining Sabah development allocation not spent can be carried forward to next year through the creation of a Future Trust Account.

He said the mechanism could ensure that approved allocations continue to be utilised, especially when project implementation faces bureaucratic, technical or other issues causing delays.

Wetrom said Sabah received an allocation of RM18.7 billion for 2027, up from RM1.1 billion a year earlier, but the failure to use the entire allocation is detrimental to the state which still needs basic infrastructure development.

In addition to Wetrom, Datuk Seri Wilfred Madius Tangau (GRS-Tuaran) urged the Federal Government to stop the culture of announcing development projects that were eventually postponed and became sick projects, in addition to ensuring Sabah's development allocations are fully spent and utilised by the people.

He asked the government to detail the total Sabah development allocation for 2026 that has been channelled and spent, including project value under implementation of Sabah Public Works Department (JKR) as well as the number of sick projects in the state run by JKR Sabah and Federated JKR.

Madius also suggested five improvement steps, including ensuring that land, approvals and utilities matters are completed before the project starts, as well as revealing physical progress, actual costs, completion dates and any extension of project life to the public.

"In addition, the sick project also needs to have a recovery plan and follow-up action, while the second extension due to contractor shortcomings is due through independent review including consideration of contract termination according to law, in addition to strengthening JKR Sabah as technical agency for Federal projects worth RM50 million below", he said.

The Congress of Deputies is reconvening today.