Kota Kinabalu: The 2026 Federal Budget delivers both tangible and symbolic progress for Sabah, said Liberal Democratic Party (LDP) President Datuk Chin Su Phin.
Chin said it signifies the Federal Government’s genuine intent to honour the Malaysia Agreement 1963 (MA63) and promote equitable growth across all regions.
“Sabah has emerged as one of the biggest beneficiaries of the new budget, receiving an unprecedented RM6.9 billion in development allocation in which the highest in history.
“The budget carries not only fiscal significance but also represents a concrete step toward fulfilling the spirit of MA63.
“If effectively implemented, these initiatives will drive major transformation in infrastructure, energy, agriculture, and socio-economic development, as well as uplift the quality of life for Sabahans.
“It will also strengthen Sabah’s role as a key growth engine in Malaysia’s journey toward national prosperity and regional cohesion.
“This record-breaking distribution of funds demonstrates the Federal Government’s determination to bridge the development gap between East and West Malaysia, enhance public infrastructure and social services, and strengthen confidence in the nation’s regional equity policy. It also signifies Sabah’s growing importance as a key driver in Malaysia’s overall development landscape.
“In terms of fiscal autonomy and regional equity, the Federal Government announced an increase in the special grant for Sabah and Sarawak to RM600 million, a major leap from previous years.
“This milestone marks significant progress in federal-state fiscal negotiations and reflects Putrajaya’s recognition of Sabah’s right to greater financial independence.
“The increased allocation will empower the state to accelerate infrastructure, rural development, and education initiatives, especially in improving roads, water supply, and local economic projects,” he said in a statement.
Chin also expressed the party’s gratitude to the Madani Government for its strong commitment to Sabah’s development as reflected in the 2026 Federal Budget.
According to Chin, the 2026 budget is not only a key step in implementing MA63 but also a reflection of the Madani Government’s sincerity in promoting balanced regional development across Malaysia.
Chin said that on energy and water infrastructure, the Federal Government continues to support Sabah in strengthening its utilities to ensure stable living conditions and industrial growth.
“The budget allocates RM1.2 billion to maintain stable electricity supply state-wide, alongside RM765 million for the construction of the Southern Link Transmission Line to improve power grid connectivity in southern Sabah.
“These investments are expected to resolve the state’s long-standing power instability issues and boost the growth of industrial zones such as Kota Kinabalu, Lahad Datu, and Sandakan.
“In addition, RM1 billion is allocated to upgrade the state’s water infrastructure, including new pipeline projects in Tawau and replacement of aging pipes in Kota Kinabalu, Penampang, and Putatan.
These projects will reduce water disruptions, enhance efficiency, and modernize Sabah’s water management systems for sustainable urban and rural development.”“On transportation development, the Federal Government continues to place Sabah at the core of East Malaysia’s connectivity agenda.
“A total of RM1.67 billion is allocated to advance the Pan Borneo Highway and Sabah-Sarawak Link Road (SSLR) projects, expediting regional network construction.
The first phase of the SSLR is expected to be completed by November 2026, with the second phase already underway, while tenders for the Trans-Borneo Highway will be opened in the first quarter of 2026.
“These projects, part of a larger RM48 billion East Malaysia Transport Development Plan, will greatly enhance rural-urban connectivity, lower logistics costs, and strengthen trade between Sabah, Sarawak, Brunei, and Kalimantan - offering long-term economic benefits for the region,” he said.
Chin further stated that agricultural modernization and food security are also major highlights of this budget, with Sabah set to receive RM300 million to expand corn and rice cultivation as well as aquaculture – supported by federal technical training and mechanization assistance to improve productivity.
“The initiative aims to enhance local agricultural competitiveness and contribute to Malaysia’s national food security strategy by reducing import dependence.
“Additionally, a significant share of the nationwide RM2.4 billion ‘Smallholder Support and Green Energy Initiative’ will benefit Sabah. The programme will assist small oilpalm growers, renewable energy entrepreneurs, and cooperatives, driving rural economic transformation.
“Areas such as Keningau, Lahad Datu, and Pitas are expected to evolve into green industry zones, generating employment and alleviating poverty,” said Chin.
