No Restrictions on Rural Road Funds

By the Editorial Team · Thursday, September 3, 2026

The Treasury confirmed that all approved funds for rural road projects under the Rural and Regional Development Ministry have been disbursed, but payment delays have occurred due to the ministry exceeding its budget allocations in recent years. To address this, the Finance Ministry is working with the Rural Development Ministry to realign budgets and an additional RM300 million has been allocated in 2026 to clear outstanding contractor payments, preventing further economic disruption.

KUALA LUMPUR — The Treasury has clarified that there are no restrictions on funds allocated to the Rural and Regional Development Ministry for rural road projects, with all approved budget disbursed to date, according to Treasury secretary-general Tan Sri Johan Mahmood Merican.

Addressing concerns over delayed payments to contractors, Johan explained that the ministry has nearly exhausted its yearly allocation, resulting in some payment lags. He noted that in recent years, the Rural and Regional Development Ministry has consistently spent beyond its approved budgets for rural road initiatives. Specifically, the ministry spent RM1.8 billion in 2023 against an allocation of RM1.1 billion, RM2 billion in 2024 against RM1.3 billion, and RM2.3 billion in 2025 compared with the RM1.6 billion allocated. As of June 2026, the ministry had spent RM1.9 billion of the RM2.1 billion budgeted for the year.

Johan emphasized that each ministry is responsible for managing its expenditures within the framework of the annual budget approved by Parliament. To address the current challenges, the Finance Ministry is collaborating with the Rural and Regional Development Ministry to realign budget allocations according to spending priorities.

In 2026, an additional RM300 million was approved to help clear outstanding payments to contractors, with further efforts underway to identify savings from other ministries to cover the Rural and Regional Development Ministry’s excess commitments.

Deputy Prime Minister and Rural and Regional Development Minister Datuk Seri Dr Ahmad Zahid Hamidi underscored the urgency of resolving delayed contractor payments, warning that such delays place undue burdens on contractors and pose risks to the broader local economy. He highlighted the ripple effects on suppliers, subcontractors, workers, and service providers linked to these projects.

The government continues to monitor the situation, aiming to ensure timely payments while aligning budgetary allocations with actual project expenditures.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.