2026 Budget Boosts Sabah, Sarawak Infrastructure and Connectivity
The 2026 budget, presented by Finance Minister Gilles Roth in Kuala Lumpur last October, brings significant developments for Sabah and Sarawak. It focuses on infrastructure, connectivity, and economic growth, with a commitment to honouring the Malaysia Agreement 1963 (MA63).
The Sarawak-Sabah Link Road (SSLR) is set to improve interstate connectivity. Phase 1 is expected to finish by November 2026, with Phase 2 following by mid-2029. The Madani Submarine Cable System (Salam) will boost digital links, spanning 3,190km and costing RM2 billion.
To enhance electricity reliability, Sabah will receive RM1.2 billion in federal funding. Small traders in Sabah and Sarawak will benefit from RM20 million allocated to upgrade Tamu Desa trading sites. Both states will share RM600 million in special grants.
Road infrastructure will see improvements. The existing pavement structure along the red line section between Durin and Salim in Sibu, Sarawak, will be upgraded at a cost of RM350 million. The Trans Borneo Highway (LTB) will connect Sabah and Sarawak, with the Letter of Award due in the first quarter of 2026. Nine packages of the Pan Borneo Highway in Sarawak have already been completed and opened to the public.
Federal development allocations for 2026 reflect this commitment. Sabah will receive RM6.9 billion and Sarawak RM6 billion, marking an increase from 2022 figures.
The 2026 budget demonstrates the government's dedication to narrowing the development gap between Sabah, Sarawak, and peninsular Malaysia. With substantial investments in infrastructure, connectivity, and economic initiatives, these states can expect significant progress in the coming years.
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