KUALA LUMPUR: No restrictions have been placed on allocations to the Rural and Regional Development Ministry for rural road projects, with all approved funds fully disbursed, says Treasury secretary-general Tan Sri Johan Mahmood Merican.
He said payment delays to contractors stem from the ministry having already spent almost its entire allocation for the current year.
“For several years, the ministry has committed and spent more than the annual allocations approved for rural road projects,” he said in a statement.
Johan noted that the ministry spent RM1.8bil in 2023 against an approved allocation of RM1.1bil, and RM2bil in 2024 against an allocation of RM1.3bil.
In 2025, the ministry spent RM2.3bil compared with its RM1.6bil allocation. For 2026, actual spending had already reached RM1.9bil of the approved RM2.1bil allocation as of June.
Johan said each ministry was responsible for planning and managing its spending based on the annual Budget allocation approved by Parliament.
He added that the Finance Ministry is working with the Rural and Regional Development Ministry to address the issue by realigning allocations 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 and Regional Development Ministry’s commitments beyond its approved allocation,” he said.
Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi called for an urgent resolution of outstanding payments to contractors for completed work that met contract requirements.
Ahmad Zahid, who is also Rural and Regional Development Minister, warned that payment delays burden contractors and threaten the broader local economy, impacting suppliers, subcontractors, workers and service providers.
