KUALA LUMPUR (Sept 2): The Ministry of Finance on Wednesday denied restricting payments to contractors building rural roads. 

Instead, the delays were due to the Ministry of Rural and Regional Development, or KKDW, spending almost all of its allocation, Treasury secretary general Tan Sri Johan Mahmood Merican said in a statement. KKDW had spent RM1.9 billion as at June, out of the RM2.1 billion allocation for 2026, he noted.

The Ministry of Finance is working with KKDW to address the issue, including by reprioritising and reallocating the ministry’s budget based on its priorities, Johan said.

The statement came after Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi, who is also rural and regional development minister, reportedly expressed frustration over delayed payments to contractors despite them completing their work and meeting project milestones.

KKDW also has been spending more than its annual allocation on roads construction for years. In 2025, the ministry spent RM2.3 billion against an allocation of RM1.6 billion. In 2024, the ministry spent RM2 billion against an approved allocation of RM1.3 billion.

Each ministry is responsible for planning and managing its expenditure based on the annual budget allocation approved by Parliament.

For now, the Ministry of Finance has also approved an additional RM300 million this year to help clear outstanding payments owed to contractors for rural road projects.

The ministry is also identifying savings from other ministries to help cover KKDW’s excess commitments, Johan added.