Fourteen mega projects in Sabah, including rural roads, hospitals and schools, were allegedly cancelled after funding meant for the projects was not channelled to the Rural and Regional Development Ministry (KKDW).
UMNO Kota Belud division chief Azuwan Marjan @ Norjan raised the issue during the 2026 UMNO General Assembly on Saturday, claiming the cancellations would ultimately affect Sabahans, particularly those living in rural and interior areas.
Azuwan said he understood the position of UMNO president and Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, who is also the Rural and Regional Development Minister, following a dispute over the ministry’s spending.
“We understand the feelings of our president. How can the ministry spend beyond its allocation, as stated by the Treasury secretary-general, right?” he said while debating the president’s policy speech.
He said the people of Sabah would ultimately bear the consequences of the funding issue.
Previously, Ahmad Zahid had urged the government to expedite the channelling of approved allocations to KKDW to address serious delays in payments faced by contractors.
He also criticised the realignment of government funds and the implementation of initiatives outside the approved budget, saying these had disrupted planned programmes and affected contractors.
However, Treasury secretary-general Tan Sri Johan Mahmood Merican denied that KKDW’s funds had been withheld, explaining that payment delays occurred because the ministry had nearly exhausted its annual allocation.
As of June, KKDW was reported to have spent RM1.9 billion out of its RM2.1 billion allocation for rural road projects this year.
Johan said an additional RM300 million had also been approved to help clear the outstanding payments.
Responding to the Treasury secretary-general’s remarks, Ahmad Zahid’s press secretary Fadzmel Fadzil denied that KKDW had made unilateral financial commitments or spent beyond its means.
Fadzmel said the commitments flagged by the Finance Ministry were not new spending, but delayed payments carried over from 2019 to 2021.
Azuwan also called for all outstanding allocations under the Malaysia Agreement 1963 (MA63) to be resolved immediately.
He said the matter should be given priority if Barisan Nasional (BN) returned to lead the Federal Government after the 16th General Election (GE16).
Azuwan referred to a meeting held the previous day between “guru” and Sabah Chief Minister Datuk Seri Hajiji Noor as well as Sarawak Premier Tan Sri Abang Johari Tun Abang Openg, saying he understood that no concrete solution had been reached.
“Insya-Allah, if UMNO and BN are destined to lead the government in Putrajaya, we must resolve MA63,” he said.
Azuwan said Ahmad Zahid had consistently pledged to fulfil outstanding provisions under MA63 if BN returned to power, including a pledge made during the Kimanis by-election campaign.
On diesel subsidies, Azuwan urged the government to scrap the targeted subsidy system under Budi Madani, saying the monthly 400-litre quota was insufficient for Sabah residents.
He said the long distances between districts in Sabah meant residents generally used more diesel than those in Peninsular Malaysia.
Azuwan also questioned the requirement for applicants to own a diesel vehicle to qualify for the quota, saying it disadvantaged farmers, fishermen, rural entrepreneurs, smallholders, small traders and contractors.
Using farmers as an example, he said the cost of cultivating one acre of paddy for a single season had almost doubled, from about RM500 to RM600 before the diesel price increase to between RM1,100 and RM1,200 now.
“It has increased almost twofold. How can farmers continue to make a living? Some can no longer afford to cultivate their paddy fields because they feel four months of hard work is no longer worthwhile,” he said.
