KUALA LUMPUR – The Federal Government is not automatically bound by decisions made by state governments to approve additional funding when development project costs rise, as any such request must be renegotiated and independently assessed, Prime Minister Datuk Seri Anwar Ibrahim told the Dewan Rakyat today.
He said any request involving a Notice of Change (NOC) requires a fresh evaluation, particularly to determine the cause of the cost escalation and whether it stems from contractors or other factors, before any additional allocation or loan is considered.
“The moment a Notice of Change is issued, it involves additional funding, and the matter must be renegotiated. First, we need to determine the contractor’s role and the root cause of the cost increase.
“Second, once additional funding is required, it involves the Federal Government, and the Federal Government cannot be bound by decisions made by state governments and automatically provide additional allocations or loans whenever costs escalate,” he said during Prime Minister’s Question Time in Dewan Rakyat.
The Prime Minister was responding to a supplementary question from Datuk Awang Hashim (PN-Pendang) regarding Kedah’s request for additional funding for the Pulau Bunting Water Treatment Plant, which requires NOC approval.
He added that Deputy Prime Minister and Energy Transition and Water Transformation Minister Datuk Seri Fadillah Yusof would provide further clarification on the matter.
Anwar, however, assured that the Federal Government would continue engaging with state administrations while balancing revenue-sharing considerations with development priorities and infrastructure needs.
“Revenue sharing remains subject to negotiations. If some states, such as Kelantan, Sabah and Sarawak, receive larger allocations, it is because they have urgent development requirements.
“In Kelantan, flood mitigation projects are a priority, while in Sabah and Sarawak the focus is on basic infrastructure, including highways, flood mitigation works and other projects deemed critical for development,” he said.
At the same time, he said the government is prioritising strategic growth corridors to drive economic expansion, including the Johor-Singapore Special Economic Zone (JS-SEZ), Kerian in northern Perak, Kuching in Sarawak and Sabah.
“Sarawak is making significant progress in data centres, information technology and semiconductor manufacturing through collaborations with foreign expertise.
“Giving priority to these sectors will naturally accelerate economic growth,” he said in reply to Datuk Dr Richard Rapu (GPS-Betong) on balancing state revenue-sharing demands with national growth strategies. – June 30, 2026