Prime Minister Datuk Seri Anwar Ibrahim urged the Ministry of Rural and Regional Development (KKDW) and the Ministry of Finance (MOF) to resolve issues related to budget allocations and delayed payments to contractors amicably through discussion. He said, "Let's discuss this amicably. I want the ministries to discuss it properly, both ministries" [1, 2].
Deputy Prime Minister and Rural Development Minister Datuk Seri Dr Ahmad Zahid Hamidi had earlier raised concerns about severe delays in payments to contractors involved in KKDW projects, including rural road works [s1-s5].
Treasury Secretary-General Tan Sri Johan Mahmood Merican stated there were no restrictions imposed by MOF on KKDW's allocations for rural road projects and said the full allocation had already been channelled. He explained that payment delays stemmed from KKDW nearly fully utilising its current year's allocation [s1-s5].
Finance Ministry data shows KKDW has consistently exceeded its budget allocations for rural road projects over the past four years. In 2022, KKDW spent its full RM1.1 billion allocation. In 2023, expenditure reached RM1.8 billion versus an allocated RM1.1 billion. In 2024, the ministry spent RM2 billion against a RM1.3 billion budget. In 2025, expenditure swelled to RM2.3 billion versus RM1.6 billion allocated [2].
As of June 2026, KKDW had spent RM1.9 billion of its RM2.1 billion approved allocation for the year [2, 3].
However, KKDW press secretary Fadzmel Fadzil denied that the ministry had overspent the parliamentary allocations. He attributed payment backlogs to delayed commitments stemming from the COVID-19 pandemic rather than mismanagement or overspending [2].
Anwar Ibrahim's call for an amicable resolution between KKDW and MOF seeks to ease tensions over delays affecting contractors and ensure smoother project execution. The ministries are expected to engage in further discussions shortly.
