When Projects Exist on Paper
Before examining the current disagreement between the Ministry of Finance (MOF) and the Ministry of Rural and Regional Development (KKDW), I am reminded of an earlier experience.
Before 2014, I was part of a team of investigative writers looking into rural infrastructure projects and allocations amounting to approximately RM7 billion. What we encountered was deeply troubling.
Water pipes had been delivered and piled up in villages, but nobody appeared concerned about installing them and ensuring that water reached the households. Electricity poles and cables had been erected, but there was no apparent effort to arrange and coordinate with Sabah Electricity Sdn Bhd (SESB) to connect the installations to the grid and provide electricity.
Some village roads were merely compacted sand. They turned muddy after the first rainfall, yet were claimed and paid for as asphalt roads. Solar projects were claimed for payment despite not existing at the locations examined, where electricity generation continued to depend on diesel engines.
There were also mini-hydro schemes and water supply projects to rumah panjang where each stage of progress appeared to take place only after a state or general election. In other instances, annual road maintenance payments continued for roads that physically did not exist.
This list is by no means exhaustive. These experiences illustrated how allocations, project records and claims of completion could become detached from the actual delivery of projects to the communities they were meant to serve.
There were also indications, in cases we examined, that public allocations could be diverted to serve political interests, including the building of political war chests. Whether particular individuals or networks benefited, and whether criminal conduct occurred, is a matter for the relevant authorities should they be interested in investigating the cases. Our observations are not judicial findings, but the people associated with some of these dealings and their opaque nature raised questions that deserve scrutiny.
This experience is relevant to the present dispute. It explains why scrutiny of rural infrastructure expenditure is necessary. But it must never become a reason to presume that every project, contractor or community in Sabah and Sarawak is undeserving of public funding.
The Dispute Takes Another Turn
The disagreement between Deputy Prime Minister and Rural Development Minister Ahmad Zahid Hamidi and Finance Minister II Amir Hamzah Azizan initially centred on allocations, expenditure and outstanding payments to contractors. It became more contentious when Zahid raised the issue of rural road projects in Sabah and Sarawak allegedly being cancelled or stopped, including projects for which letters of acceptance had reportedly been issued.
The intervention by Sabah MP Isnaraissah Munirah Majilis brought the human consequences into sharper focus. Her message was straightforward: while the ministries argued among themselves, rural communities were the ones suffering. She also questioned why the problem had persisted since 2023 without a satisfactory resolution.
That is an important intervention. For people living in remote settlements, a rural road is not simply a development allocation or a government performance indicator. It is access to schools, healthcare, markets, employment and basic services.
MOF's Financial Argument
MOF's figures deserve serious consideration.
For 2023 to 2025, the original allocations for the Rural Road Program (Jalan Luar Bandar, or JALB) totalled approximately RM3.98 billion. The revised allocations rose to RM6.14 billion, an increase of RM2.16 billion through additional approvals and transfers. Yet MOF reported outstanding contractor arrears of RM1.05 billion at the end of 2025.
MOF further stated that funds had been shifted from other KKDW development programs to support rural road commitments. These included programs involving KEMAS, MARA, JAKOA, rural water and electricity supply, and regional development agencies.
For 2026, the original allocation of RM2.11 billion was increased to approximately RM3.1 billion. This included RM500 million in additional funding approved by MOF and approximately RM491 million through KKDW's internal reallocation. MOF maintained that even this revised amount was insufficient to meet all existing commitments.
There is an important point here. The increase in the JALB allocation cannot be considered in isolation. MOF says the additional RM500 million came from savings or available development allocations elsewhere. In other words, giving more to one program can mean less room for another.
The question is therefore not simply why more money was not provided. It is also how commitments accumulated beyond the original allocations, why arrears remained despite substantial increases, and what other rural development priorities were affected.
MOF has also referred to weaknesses in the Tender Terbuka Pra-Kelayakan Terpilih (TTPKT), or Selected Pre-Qualified Open Tender method. Introduced in 2023 as a special procurement approach to expedite infrastructure projects, it was intended to accelerate delivery.
However, the Auditor-General's Report found that its implementation, including in KKDW, had not achieved the government's original objectives. MOF subsequently stopped approving its use for new KKDW projects.
This suggests that the debate extends beyond funding to questions of project planning and procurement governance.
Cancelled or Deferred?
The most contentious issue remains the status of the projects themselves.
MOF's position is that its instruction of 10 September was to defer the issuance of new Surat Setuju Terima (SST), or Letters of Acceptance, pending the resolution of existing commitments and arrears. It maintains that deferring new commitments is not the same as cancelling approved or ongoing projects.
Zahid, however, has maintained that instructions were issued to cancel projects, including some for which SSTs had already been issued. Other Sabah and Sarawak MPs have also raised concerns, with some claiming to have seen cancellation letters affecting projects in their constituencies.
These competing accounts should not be treated as settled facts without examining the relevant documents. The distinction between an unissued SST being deferred and an already-issued SST being cancelled is significant. But for rural communities, the immediate concern is more practical: will the road be built, when will work begin, and will the project actually be delivered?
MOF's assurance that approved projects will proceed is important. It needs to be matched by clarity on their status and implementation.
Resolve the Problem, Not Escalate the Dispute
There is also a responsibility on KKDW to address the outstanding commitments and contractor payments. The ministry should concentrate on reconciling its project commitments, resolving payment arrears and providing clarity on the status of affected projects. These matters require engagement and resolution between the ministries, not an escalation into a political contest between East Malaysia and the Federal Government.
There will be a time for political contest when election campaigns begin. But rural communities should not have to wait for that season, nor should their development needs become a bargaining point in a political dispute. The immediate responsibility is to get projects moving and ensure that contractors are paid for work properly completed.
The Larger Issue is Delivery
Neither fiscal discipline nor rural development should be treated as competing objectives. Government must protect public funds, avoid commitments beyond its financial capacity and ensure that contractors are paid for completed work. Equally, rural communities should not bear the consequences of poor planning, weak controls or unresolved disputes between ministries.
My earlier experience has taught me that the existence of an allocation, a contract or a completion report does not necessarily mean that the public has received the promised service. That is why accountability must ultimately be measured on the ground.
The issue is bigger than whether MOF or KKDW has the stronger argument. It is whether public money is properly committed, whether the work is completed, and whether the people for whom the projects were intended actually benefit.
Fiscal discipline is not an end in itself. Its purpose is to ensure that public resources are used responsibly and reach the people who need them. In rural Sabah and Sarawak, that means roads that can be travelled, water that flows from the tap and electricity that reaches the home—not merely projects that appear in government records.
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