KUALA LUMPUR: An additional RM500mil has been approved for the Rural and Regional Development Ministry after its allocations for rural projects proved insufficient to meet its contractual commitments, the Dewan Rakyat was told.
Prime Minister Datuk Seri Anwar Ibrahim, in his capacity as Finance Minister, said the additional funds were approved through the issuance of a letter authorising expenditure beyond the allocated budget.
"The annual Budget allocations for rural projects under the ministry were insufficient to meet its contractual commitments.
"The additional allocation was approved after savings in development expenditure from other ministries were identified," he said in a parliamentary reply on Monday (Oct 19).
Lim Guan Eng (PH-Bagan) had asked what action had been taken against those in the ministry responsible for violating financial procedures by allowing expenditure to exceed allocations by RM2.1bil between 2023 and last year.
Anwar also said the ministry had been directed to defer the issuance of new letters of acceptance for rural road projects to prevent further accumulation of payment arrears.
He said it had also been asked to prepare projections of the allocations required for rural roads until the end of this year and for next year, based on awarded contracts, to determine the additional funding needed.
Anwar said the original allocations for rural road projects were RM1.09bil in 2023, RM1.32bil in 2024 and RM1.57bil last year.
"To reduce payment arrears, the ministry reallocated existing development expenditure allocations from other projects through internal notices of change to meet the funding needs of rural projects.
"This increased the allocations to RM1.85bil in 2023, RM2.02bil in 2024 and RM2.27bil last year.
"However, the revised allocations remained insufficient to cover the ministry's commitments for rural projects.
"The Finance Ministry has since agreed to increase allocations for rural projects to RM2.11bil this year and RM2.27bil next year, compared with the usual annual allocation of just over RM1bil for rural road projects," he added.
