Finance Minister Datuk Seri Anwar Ibrahim said the additional allocation was approved by identifying savings from development expenditure in other ministries.
He said the Finance Ministry had also directed the Rural and Regional Development Ministry on Sept 10 to suspend the issuance of new letters of acceptance for rural road projects to prevent further accumulation of payment arrears.
"The Rural and Regional Development Ministry has made commitments and spent beyond the original allocations approved under the annual Budget for rural road projects over the past few years, resulting in outstanding payments and delays in payments to contractors," he said in a written parliamentary reply.
"The government had increased annual allocations for rural road projects to more than RM2 billion under the 2026 Budget and 2027 Budget.
"However, these allocations remained insufficient to meet the ministry's existing contractual commitments," he said.
Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi is the rural and regional development minister.
The Finance Ministry had also asked the Rural and Regional Development Ministry to project its rural road funding requirements until the end of this year and for 2027, based on contracts already awarded, to determine the additional funding needed.
Anwar was responding to Lim Guan Eng (PH-Bagan), who asked what action had been taken against those responsible for alleged breaches of financial procedures involving RM2.1 billion in spending beyond allocations between 2023 and 2025.
On contractor appointments, Anwar said rural road projects were generally awarded through tender processes, including open tenders and the Pre-Qualified Open Tender (TTPKT).
He said the Finance Ministry introduced TTPKT in 2023 as a special procedure to expedite project implementation.
However, the Auditor-General's Report No. 2/2025 found that the implementation of TTPKT, including by the Rural and Regional Development Ministry, had failed to achieve the government's original objectives.
"Accordingly, the Finance Ministry has also stopped approving the use of TTPKT by the Rural and Regional Ministry for new projects," he said. - NST
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