KUALA LUMPUR: Treasury secretary-general Tan Sri Johan Mahmood Merican has stated that no restrictions had been placed on allocations to the Rural and Regional Development Ministry for rural road projects, with the funds fully disbursed.
He said the difficulties in processing payments to contractors stemmed from nearly all of the current year's allocation already being spent.
"For several years, the ministry has made commitments and spent more than the annual allocations approved for rural road projects,” he said in a statement on Wednesday (Sept 2).
According to Johan, the ministry spent RM1.8bil in 2023, exceeding its approved allocation of RM1.1bil, and RM2bil in 2024, exceeding its approved allocation of RM1.3bil.
He said the ministry spent RM2.3bil in 2025, exceeding its approved allocation of RM1.6bil, adding that the approved allocation for 2026 was RM2.1bil, while actual spending had reached RM1.9bil as of June.
Johan said each ministry is responsible for planning and managing its spending based on the annual Budget allocation approved by Parliament.
According to Johan, the Finance Ministry was working with the Rural Ministry to address the issue, including by adjusting the ministry's allocation to align with spending priorities.
"So far in 2026, the Finance Ministry has approved an additional allocation of RM300mil to help settle outstanding payments to contractors.
"The Finance Ministry is also identifying savings from other ministries to help offset the Rural Ministry's commitments beyond its approved allocation,” he said.
Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi was reported on Tuesday (Sept 1) as calling for serious attention to payments to contractors, particularly for work that had been completed and met the progress requirements set out in development contracts, including rural road projects under the Rural Ministry.
The Rural and Regional Development Minister said payment delays were not only a burden on contractors but could also have wider implications for suppliers, subcontractors, workers and service providers, potentially affecting the local economy.- Bernama
