KOTA KINABALU: The Federal Government has dismissed claims that rural road projects in Sabah and Sarawak have been cancelled, explaining that they are simply on hold for exceeding approved allocations.
Minister in the Prime Minister's Department (Sabah, Sarawak Affairs and Special Functions) Datuk Mustapha Sakmud said postponing the issuance of new letters of acceptance (SST) should not be taken as a cancellation of approved rural road projects.
He said the Sept 10 directive to defer new SSTs was a fiscal management measure aimed at preventing further payment arrears from accumulating while ensuring ongoing projects could be completed.
"Claims that the Madani Government has cancelled or reduced allocations for rural road projects in Sabah and Sarawak are unfounded and should be supported by clear evidence.
"The postponement of new SSTs cannot be equated with the cancellation of development projects that have already been approved," he said in a statement on Wednesday (Oct 28).
The matter raised questions among political parties after Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi touched on it in Parliament.
The Finance Ministry had also stated that the Rural and Regional Development Ministry, which Ahmad Zahid heads, had spending commitments exceeding its approved annual allocation for rural road projects.
Mustapha said the real issue was contract commitments and expenditure that exceeded approved annual allocations, resulting in outstanding payments and delays in settling contractors' claims.
He said the government has strengthened financial controls while continuing to honour commitments to existing projects.
He said allocations for rural roads continued to rise, with national funding increasing from RM2.11bil this year to RM2.27bil in Budget 2027.
He said previous administrations never allocated more than RM1bil for rural roads, with allocations reaching RM1.09bil only in 2023.
"This clearly shows the commitment of Prime Minister Datuk Seri Anwar Ibrahim in addressing the development needs of Sabah and Sarawak," he said.
Mustapha also said the Finance Ministry had approved an additional RM500mil this year to help settle outstanding payments owed to rural roads contractors.
"The approval of additional funding shows the government is not reducing financing for rural road development. Instead, it is providing extra allocations to ensure existing commitments can be fulfilled.
"Development in Sabah and Sarawak remains a long-term investment and a priority for the Madani Government," he added.
