Kuala lumpur: Sabah and Sarawak received the highest allocations under Budget 2026 with RM6.9 billion and RM6 billion respectively, said Prime Minister Datuk Seri Anwar Ibrahim. He highlighted that these allocations reflect the government's initiative to close the development gap, particularly in infrastructure, in line with the Malaysia Agreement 1963 (MA63).

According to BERNAMA News Agency, the development allocation for Sabah increased from RM4.4 billion in 2022, while Sarawak's allocation rose from RM2.9 billion in 2022. The Special Grant rate for both states will also increase to RM600 million from RM300 million in 2023. Additionally, the government has allocated RM1.2 billion to ensure uninterrupted power supply in Sabah.

The budget also includes RM765 million for the Southern Link Transmission Line Project to maintain long-term electricity supply sustainability. This decision follows a landslide incident in Penampang that disrupted power for 230,000 users on Sabah's east coast. The Sabah water project, with a RM1 billion allocation since 2024, is currently underway and expected to finish next year.

Anwar also announced RM1.67 billion for the Pan Borneo Sabah project, ensuring its timely implementation. The Sarawak-Sabah Link Road (SSLR) Phase 1 is set for completion in November 2026, with SSLR 2 expected by mid-2029. The Trans Borneo Highway Project (PTB) will receive its Letter of Acceptance by the first quarter of next year.

The government plans to upgrade road pavement along the red line section between Durin and Salim in Sibu, Sarawak, at a cost of RM350 million. Total public infrastructure investment in both states will reach RM48 billion. Furthermore, the Malaysian Communications and Multimedia Commission (MCMC) will develop the MADANI Submarine Cable System (SALAM) in both states, covering 3,190 kilometers and costing RM2 billion.

Lastly, RM20 million will be allocated to enhance sites and trading spaces with basic facilities for small traders at tamu desa (rural markets) in both states.