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SHAH ALAM – Sabah and Sarawak will receive higher federal allocations in 2027, with Sabah allocated RM18.7 billion and Sarawak RM16.2 billion, as the government continues efforts to fulfil commitments under the Malaysia Agreement 1963 (MA63).
Finance Minister Datuk Seri Anwar Ibrahim said the allocations would increase from RM17.6 billion for Sabah and RM15.1 billion for Sarawak, this year.
He said the Madani government had also increased the interim special grant for the two states threefold, with the latest rate totalling RM1.5 billion.
“For decades, the special grant has not kept pace with the development needs of Sabah and Sarawak.
“The latest interim rate totals RM1.5 billion and the payment will be settled before the end of the year, while negotiations with both states continue to finalise a fair and sustainable annual formula,” he said when tabling 2027 Budget in the Dewan Rakyat, today.
The Prime Minister said 12 matters under MA63 had been finalised under the Madani administration, including permanent representation for Sabah and Sarawak in the Inland Revenue Board (LHDN), the transfer of Bintulu Port to Sarawak and the transfer of MASwings to the state, where it will operate as AirBorneo.
The Federal Government would continue providing RM209 million in subsidies to support AirBorneo services benefiting 820,000 passengers in rural areas. It would also provide RM600 million to ensure the continuity of electricity supply in Sabah following the transfer of electricity regulatory powers to the state.
Meanwhile, he said the government agreed to double the Public Service Department (JPA) scholarship offers for students from Sabah and Sarawak, creating opportunities for 4,200 students from both states to pursue higher education annually.
On infrastructure, the government will continue road projects in Sabah and Sarawak with an allocation of RM3.3 billion in 2027. These include the Trans-Borneo Highway, the Sarawak-Sabah Link Road 1 and Phase 1B of the Pan Borneo Highway in Sabah, with the latter two targeted for completion by the end of next year.
The government will also allocate RM350 million for federal road maintenance in both states, specifically for G1 to G4 contractors.
Anwar said the Federal Government would begin formal negotiations with the Sarawak government to finalise the incentive framework, one-stop investment facilitation centre and strategic infrastructure requirements for the proposed Sibu Special Economic Zone.
Separately, the government agreed to install a Static Synchronous Compensator (STATCOM) system at the Dam Road (Lahad Datu) and Segaliud Main Intake Substations at a cost of RM204 million, while the Southern Link transmission line project would continue as a long-term measure to ensure electricity supply in Sabah.
