Zahid's ministry to get RM500m from other ministries' savings to cover overspending

The Finance Ministry said it had given the Rural and Regional Ministry an additional RM500 million to top up its RM2.1 billion budget allocation and cover this year's overspending.

It said the money came from savings other ministries achieved in their development budget.

On top of that, it is also giving...

The Finance Ministry said it had given the Rural and Regional Ministry an additional RM500 million to top up its RM2.1 billion budget allocation and cover this year's overspending.

It said the money came from savings other ministries achieved in their development budget.

On top of that, it is also giving the ministry - which is overseen by Deputy Prime Minister Ahmad Zahid Hamidi - a bigger 2027 budget allocation of RM2.27 billion.

This was revealed in response to a query by Lim Guan Eng (Harapan-Bagan) on what action is being taken to hold the Rural and Regional Ministry accountable for bursting its budget.

In a written reply yesterday, the Finance Ministry indicated that it didn't just throw money at the problem, which stemmed from rural road projects.

Instead, it instructed the ministry on Sept 10 to postpone issuing new letters of acceptance for rural roads so it won't add to the payment backlogs that the ministry is suffering.

Additionally, it tasked the ministry with preparing projections for rural roads for the rest of 2026 and 2027 based on awarded contracts to determine the required allocation.

Last month, Zahid complained that many contractors are left without payments after completing projects and achieving milestones. Some have been forced out of business by the resultant cash flow issues. He urged the Finance Ministry to expedite payments.

In response, Treasury secretary-general Johan Mahmood Merican said no sanctions were imposed on the Rural and Regional Development Ministry’s allocation for rural roads, which has already been fully disbursed.

He also painted the Rural and Regional Development Ministry as consistently going over budget, and said the Finance Ministry is working to identify cost savings in other ministries to support the Rural and Regional Development Ministry’s excesses.