KUALA LUMPUR: Negotiations between the Federal Government and the Sabah state government on the special grant are scheduled to resume on December 19, as both parties reaffirm their commitment to a structured and progressive approach in resolving the matter, Finance Minister II Datuk Seri Amir Hamzah Azizan said.
He said the discussions form part of ongoing efforts by the Federal Government to strengthen fiscal arrangements with Sabah in line with the spirit of the Malaysia Agreement 1963 (MA63) and the state’s growing development needs.
According to Amir Hamzah, an earlier round of negotiations was held on November 17, 2025, which led to the establishment of a Special Grant Negotiation Committee at the officials’ level involving representatives from both governments.
“The Federal Government and the Sabah state government have agreed to conduct negotiations progressively to ensure an orderly and constructive process. The committee serves as a technical platform to address key issues in detail,” he said.
He was speaking while winding up the debate on the Supply Bill (Budget) 2026 in the Dewan Negara today.
Amir Hamzah said discussions have also covered the terms of reference that will guide future negotiations, ensuring consistency and clarity throughout the process.
He reiterated that the Federal Government, through the Malaysia Agreement 1963 Implementation Action Council (MTPMA63), remains committed to negotiating a more favourable special grant rate for Sabah, including increasing the overall amount.
He noted that in 2023, the Federal Government raised Sabah’s special grant to RM300 million, before agreeing to nearly double the amount to RM600 million starting in 2025.
“This RM600 million payment is interim in nature, while both governments work towards formulating a new and more sustainable mechanism for determining future special grants,” he said.
Amir Hamzah added that the Federal Government has consistently demonstrated its concern for Sabah’s needs through increased operating and development allocations, which rose from RM14 billion in 2023 to RM17 billion in 2026.
These funds, he said, are channelled towards strategic development projects such as the Pan Borneo Highway Sabah, rural water and electricity supply, rural road connectivity and the provision of social amenities.
