Ministry of Finance clarifies KKDW rural road spending exceeds allocations

The Malaysian Ministry of Finance (MoF) has clarified that there are no restrictions on the allocations provided to the Ministry of Rural and Regional Development (KKDW) for rural road projects. Treasury Secretary-General Tan Sri Johan Mahmood Merican stated that all allocated funds have been fully disbursed.

However, payment delays to contractors have occurred because KKDW has consistently spent beyond its approved annual budgets for rural road projects over several years. For instance, in 2023, spending reached RM1.8 billion against an allocation of RM1.1 billion. In 2024, spending rose to RM2 billion against RM1.3 billion, and in 2025, expenditure hit RM2.3 billion against a RM1.6 billion allocation.

To address these payment arrears, the MoF has approved an additional RM300 million for 2026. The MoF is currently working with KKDW to restructure allocations based on priority and is identifying potential savings from other ministries to cover the excess commitments made by KKDW.