KUALA LUMPUR, Nov 13 — Negotiations on Sabah’s 40 per cent revenue entitlement will start soon at the technical level and can proceed during the 17th state election, said Prime Minister Datuk Seri Anwar Ibrahim.
He said the negotiation would not be affected despite the state administration currently being managed by a caretaker government after the dissolution of the Sabah State Legislative Assembly on October 6 to make way for the state polls.
Anwar, who is also finance minister, said the Treasury secretary-general has sent a letter to the office of the Sabah secretary to initiate the negotiation process.
“It is true the current administration is a caretaker government, but we do not want to be perceived as delaying the matter, and the process (of initiating negotiations) has already begun.
“The Treasury secretary-general has written to the Sabah secretary stating that technical discussions may start, including on matters highlighted in the court judgment,” he said when replying to a question from Datuk Mohd Shahar Abdullah (BN-Paya Besar) in the Dewan Rakyat today.
Anwar stressed that good relations between the state and federal governments must be maintained to ensure all issues, including revenue claims, are resolved in a rational and prudent manner.
“Our responsibility as a nation is to safeguard good relations between the state and federal governments. If there are reasonable concerns, we must listen and seek solutions,” he said.
He also urged all parties to uphold the spirit of unity and cohesion and to avoid inflaming narrow racial sentiments over issues that could divide society.
“I hope this spirit of unity and cohesion is preserved, because if provocative or narrow racial issues are stirred up, it will be harmful. The only ones who benefit are those at the top, while the people struggle without water and electricity,” he added.
Anwar also clarified that the federal government’s appeal is limited to specific aspects of the High Court of Sabah’s judgment on the special 40 per cent Sabah revenue allocation, after identifying certain flaws in the decision.
He said that based on Putrajaya’s understanding and advice from the Attorney-General’s Chambers, the written judgment contained certain parts that went beyond its legal scope.
He said the court’s reasoning that the review of the special allocation after 2021 was unlawful and irrational and also linked alleged major errors to the federal government dating back to 1974.
“This ruling implies that all federal governments, state governments, and members of parliament involved since 1974 up to the current administration are deemed to have acted beyond their authority, illegally, irrationally, procedurally improper, and neglectful of their responsibilities to the state of Sabah.
“This is a very serious matter, and I urge all MPs to read the written judgment carefully. I want to stress that I do not want this to become a political polemic over the 40 per cent allocation itself, because that portion is not being appealed.
“However, statements in the judgment that we believe are inconsistent or incorrect will be challenged through the appeal process,” he said during Minister’s Question Time in the Dewan Rakyat today.
He was responding to a question from Datuk Mohd Shahar Abdullah (BN-Paya Besar) on the rationale behind the government’s decision not to challenge the overall ruling, but to appeal only on the grounds of legal irregularities and their implications.
The prime minister explained that discussions between the federal and Sabah governments to review the grant rate were held during the tenure of former prime minister Datuk Seri Ismail Sabri Yaakob, and that the increase was not done unilaterally.
He said the negotiations were legitimate and in line with Article 112D of the Federal Constitution.
“With Sabah’s agreement, the rate was raised in 2022 to RM125.6 million. When we continued with the special grant of RM600 million, it was accepted as an interim arrangement and has yet to be finalised by both Sabah and Sarawak through the MA63 Implementation Action Council — but this can be expedited,” he said.
Anwar also stressed that his explanation on the RM10 billion in federal revenue and RM17 billion in expenditure for Sabah was never intended to dispute the state’s 40 per cent entitlement.
He said the figures showed that Sabah had, in fact, benefited from greater overall federal spending in various forms of development expenditure.
Dismissing claims that the government had neglected Sabah’s rights, Anwar said such accusations were unfounded and inaccurate.
“For example, under MA63, the regulation of electricity supply must belong to Sabah, and we handed it over in January 2024. But even though it’s now under Sabah, we still provide RM1.2 billion for the state’s electricity needs.
“The same goes for RM765 million for the Southern Link transmission project, the Madani Solar Hybrid programme launched in Sabah, RM1 billion for clean water supply, and the Pan Borneo Highway,” he said.
Anwar said these measures reflected the federal government’s commitment to continue negotiations on the 40 per cent revenue while ensuring Sabah’s development needs remain a priority.
