PETALING JAYA: Prime Minister Datuk Seri Anwar Ibrahim said Sabah and Sarawak will receive the highest federal development allocations under Budget 2026.
He said the development allocation for Sabah will rise to RM6.9 billion from RM4.4 billion in 2022, while Sarawak’s allocation will increase to RM6 billion from RM2.9 billion in the same year.
“In the spirit of the Malaysia Agreement 1963 (MA63), the Madani government is committed to accelerating development in Sabah and Sarawak. This is not merely a pledge, but a concrete effort to bridge the development gap, particularly in basic infrastructure,” he said when tabling Budget 2026 in Parliament today.
Anwar said beginning this year, the Special Grant Rate (Pemberian Khas) for Sabah and Sarawak has also been doubled to RM600 million, compared to RM300 million in 2023.
He added that although the regulation of electricity supply has been fully handed over to Sabah since January last year, the Federal government will continue to provide RM1.2 billion to ensure continuous power supply.
“Following the landslide in Penampang that disrupted electricity for 230,000 users on the east coast of Sabah, RM765 million has been allocated for the Southern Link Transmission Line Project to strengthen grid resilience.
“Since 2024, the Federal government has also allocated RM1 billion for water projects in Sabah, including new pipeline installations in Tawau and upgrades of old pipes in Kota Kinabalu, Penampang, and Putatan, all of which are expected to be completed next year,” he said.
On infrastructure, Anwar said nine packages of the Pan Borneo Sarawak Highway have been completed and opened to the public, while four packages under Phase 1A of the Pan Borneo Sabah Highway are also finished.
“For 2026, RM1.67 billion has been allocated to continue the Pan Borneo Sabah project according to schedule,” he said, adding that the Sarawak–Sabah Link Road (SSLR) Phase 1 is expected to be completed by November 2026, while Phase 2 is on track for completion by mid-2029.
He said the Trans Borneo Highway (LTB) project will further strengthen land connectivity between Sabah and Sarawak, with tenders expected to be issued as early as the first quarter of 2026.
The government will also upgrade existing pavement structures along the Red Line section between Durin and Salim in Sibu, Sarawak, at a cost of RM350 million.
In total, all public infrastructure projects in both states amount to RM48 billion.
To boost digital access, the Malaysian Communications and Multimedia Commission (MCMC) will develop the Madani Submarine Cable System (SALAM), a 3,190km network worth RM2 billion linking Johor, Sarawak and Sabah.
Additionally, RM20 million has been allocated to increase sites and trading spaces with basic facilities for small traders at Tamu Desa in Sabah and Sarawak.
Anwar also said he had personally met with leaders from all states to understand their development priorities, which were taken into account in the planning of the 13th Malaysia Plan (RMK13).
This includes key projects in Penang and Johor, such as traffic dispersal upgrades, new health facilities, sports complex improvements, water infrastructure works, expressway enhancements, and new road connections to support regional development.
