Funding spat brews between Zahid's and Anwar's ministries
Published: Sep 3, 2026 8:00 AM
Updated: 10:59 AM
A rare public dispute between ministries over funding has become the latest friction point in the Pakatan Harapan-BN alliance.
The spat began on Monday when Rural and Regional Development Minister Ahmad Zahid Hamidi vented his frustration over funding disbursements during his ministry’s monthly assembly.
Urging the Finance Ministry to expedite payments, Zahid (above, left) – who is also Umno president and deputy prime minister – said many contractors have completed their projects and achieved milestones, but are left without payment, and some have been forced out of business by the resultant cash flow issues.
“We cannot make payments because the funds have not been channelled to us. Yet, we are the ones who get blamed,” the New Straits Times quoted him as saying.
The Finance Ministry, which is under Prime Minister and Pakatan Harapan chairperson Anwar Ibrahim, is responsible for funding disbursements.
Treasury secretary-general Johan Mahmood Merican responded to Zahid yesterday by stating there are no sanctions imposed on the Rural and Regional Development Ministry’s allocation for rural roads, which has already been fully disbursed.
Johan Mahmood Merican
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.
“The problems in paying contractors arose because the allocation for the current year is almost fully expended.
“Since several years ago, the Rural and Regional Development Ministry has made commitments and spent in excess of the annual allocations approved for rural projects,” he said in a statement.
“The problems in paying contractors arose because the allocation for the current year is almost fully expended.
“Since several years ago, the Rural and Regional Development Ministry has made commitments and spent in excess of the annual allocations approved for rural projects,” he said in a statement.
He added that the Finance Ministry is working with the Rural and Regional Development Ministry to resolve the matter, including restructuring its allocations and providing an additional RM300 million allocation to resolve outstanding payments to contractors.
Fuel to the fire
Several other prominent politicians also chimed in on social media.
Kamil Abdul Munim, who is Anwar’s political secretary in the latter’s capacity as finance minister, shared a copy of Johan’s press release and asked how there could be enough money if Zahid’s ministry overspent.
Fuel to the fire
Several other prominent politicians also chimed in on social media.
Kamil Abdul Munim, who is Anwar’s political secretary in the latter’s capacity as finance minister, shared a copy of Johan’s press release and asked how there could be enough money if Zahid’s ministry overspent.
Kamil Abdul Munim
“This could doom the country,” he remarked.
Umno Youth chief Dr Akmal Saleh, on the other hand, turned his attention to another ministry that has allegedly also gone over-budget – the Education Ministry led by PKR Women’s chief Fadhlina Sidek.
“Some are spreading the malicious narrative that the Rural and Regional Development Ministry has gone over-budget. Does it mean that other ministries that go over-budget are also in the wrong?” he asked.
Akmal explained that supplementary budgets, which are approved every year, cover this, and ministers are not free to spend as they wish.
“How can you govern the country properly when you can’t even understand that?” he asked.
“This could doom the country,” he remarked.
Umno Youth chief Dr Akmal Saleh, on the other hand, turned his attention to another ministry that has allegedly also gone over-budget – the Education Ministry led by PKR Women’s chief Fadhlina Sidek.
“Some are spreading the malicious narrative that the Rural and Regional Development Ministry has gone over-budget. Does it mean that other ministries that go over-budget are also in the wrong?” he asked.
Akmal explained that supplementary budgets, which are approved every year, cover this, and ministers are not free to spend as they wish.
“How can you govern the country properly when you can’t even understand that?” he asked.
Dr Akmal Saleh
Meanwhile, the Rural and Regional Development Ministry said the rural road projects were allocated RM2.107 billion this year, and 415 projects have been implemented at the cost of RM1.995 billion up as of Sept 1.
It estimated that it needs RM4 billion per year to keep the projects on track.
“The situation shows active implementation of the project nationwide and the need to keep ongoing projects moving in an orderly manner until completion,” it said.
Zahid’s aide pushes back
Zahid’s press secretary Fadzmel Fadzil pushed back against the Finance Ministry statement more directly, calling it inaccurate and misleading.
He said federal financial procedures and the Integrated Government Financial Management Accounting System (iGFMAS) strictly prevent any ministry from spending unauthorised funds.
In addition, the allocation and spending data cited in Johan's press release, which covered the years from 2022 onwards, omitted the crucial years from 2019 to 2021.
Meanwhile, the Rural and Regional Development Ministry said the rural road projects were allocated RM2.107 billion this year, and 415 projects have been implemented at the cost of RM1.995 billion up as of Sept 1.
It estimated that it needs RM4 billion per year to keep the projects on track.
“The situation shows active implementation of the project nationwide and the need to keep ongoing projects moving in an orderly manner until completion,” it said.
Zahid’s aide pushes back
Zahid’s press secretary Fadzmel Fadzil pushed back against the Finance Ministry statement more directly, calling it inaccurate and misleading.
He said federal financial procedures and the Integrated Government Financial Management Accounting System (iGFMAS) strictly prevent any ministry from spending unauthorised funds.
In addition, the allocation and spending data cited in Johan's press release, which covered the years from 2022 onwards, omitted the crucial years from 2019 to 2021.
Fadzmel Fadzil
During this period, Fadzmel said various projects were signed on but subsequently delayed by the Covid-19 pandemic.
As those delayed projects resumed, contractor claims rolled over into subsequent budget years, creating legal and contractual obligations that the government is obligated to honour.
He also rejected the Finance Ministry's portrayal of the RM300 million release as “additional funding”.
Instead, he contended that the sum is an already-due allocation approved via a Warrant to Spend on the afternoon of Sept 1 – shortly after Zahid raised the issue.
While the money is appreciated, he said it is not enough to settle all outstanding commitments to its contractors.
“Ideally, this matter should not become a dispute between ministries.
“What is more important is to seek immediate solutions to the spending commitments,” he added.
During this period, Fadzmel said various projects were signed on but subsequently delayed by the Covid-19 pandemic.
As those delayed projects resumed, contractor claims rolled over into subsequent budget years, creating legal and contractual obligations that the government is obligated to honour.
He also rejected the Finance Ministry's portrayal of the RM300 million release as “additional funding”.
Instead, he contended that the sum is an already-due allocation approved via a Warrant to Spend on the afternoon of Sept 1 – shortly after Zahid raised the issue.
While the money is appreciated, he said it is not enough to settle all outstanding commitments to its contractors.
“Ideally, this matter should not become a dispute between ministries.
“What is more important is to seek immediate solutions to the spending commitments,” he added.
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