The Ministry of Finance (MoF) has approved an additional RM300 million for the Ministry of Rural and Regional Development to help settle outstanding payments owed to rural road contractors.
MoF said there had been no restrictions on the ministry’s allocation for rural roads, with the approved allocation fully channelled to the ministry. However, payment constraints have emerged as much of the ministry’s current-year allocation has already been spent.
The ministry has, over the past several years, committed and spent more than its annual approved allocation for rural road projects.
In 2023, it spent RM1.8 billion against an approved allocation of RM1.1 billion, while spending rose to RM2 billion in 2024 against RM1.3 billion allocated.
The gap widened further in 2025, when actual spending reached RM2.3 billion compared with the RM1.6 billion approved allocation.
For 2026, the ministry had an approved allocation of RM2.1 billion and had spent RM1.9 billion as of June.
MoF said it is working with the ministry to address the issue, including restructuring the ministry’s allocations based on priorities.
It is also identifying savings from other ministries to help cover KKDW’s excess commitments.
Treasury Secretary-General Johan Mahmood Merican said the additional RM300 million had been approved this year to help resolve the outstanding contractor payments.
