Finance minister II Amir Hamzah Azizan says the rural and regional development ministry promised more road work than the approved allocations.
Amir said the ministry, headed by deputy prime minister Ahmad Zahid Hamidi, had committed to more rural road spending than the amount approved since 2023, leaving contractors waiting to be paid.
The internal shuffling of funds affected the community development department (Kemas), Majlis Amanah Rakyat (Mara) and the Rubber Industry Smallholders Development Authority (Risda), as well as rural water and electricity supply projects.
Other affected bodies were the Penang Regional Development Authority (Perda), Central Terengganu Development Authority (Ketengah), South Kelantan Development Authority (Kesedar) and South East Johor Development Authority (Kejora).
“More money for rural roads meant less money for other programmes,” Amir said when winding up the debate on the 2027 budget for his ministry in the Dewan Rakyat.
It was previously reported that the rural and regional development ministry’s original allocation for rural roads was RM1.09 billion in 2023, RM1.32 billion in 2024 and RM1.57 billion in 2025.
By diverting allocations from other projects, these figures were raised to RM1.85 billion in 2023, RM2.02 billion in 2024 and RM2.27 billion in 2025.
Despite the increased allocation, Amir said the ministry still had RM1.05 billion in payment arrears at the end of 2025.
As a result, he said the finance ministry subsequently approved an additional RM500 million for rural roads, funded by savings in development expenditure from other ministries.
These included the ministries responsible for transport, agriculture, tourism, housing, the environment, women and family development, and the economy.
“We do not want contractors who have finished their work to go unpaid,” Amir said.
Amir also denied that the finance ministry cancelled projects, saying the rural ministry was merely told to hold off awarding new road contracts until the unpaid bills were cleared.
“Therefore, claims that the finance ministry cancelled projects are untrue,” he said.
The issue came to public attention after Zahid raised concerns about delayed payments to rural development contractors, some of whom were reportedly forced to close their businesses despite completing their work.
Treasury secretary-general Johan Mahmood Merican subsequently attributed the payment delays to the ministry having used up almost all the money available for its rural road projects.
Zahid had recently defended his ministry again, arguing that it spent RM6.108 billion from 2023 to 2025 against RM6.143 billion eventually approved. - FMT
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