PENAMPANG: The Sabah Government will continue to pursue its entitlement to 40 percent of Federal revenue derived from Sabah, as enshrined in the Malaysia Agreement 1963 (MA63), through Government-to-Government (G2G) negotiations with the Federal Government, said Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor.
He said the 40 per cent entitlement is Sabah’s most significant right under MA63 and is provided for under Articles 112C and 112D of the Federal Constitution.
“I wish to stress that the State Government, under my leadership, will continue to pursue the full implementation of the 40 per cent payment through the G2G negotiations with the Federal Government, because the 40 per cent entitlement is our most significant right under the Malaysia Agreement 1963 (MA63), as well as being enshrined in the Federal Constitution of Malaysia. This right must be fulfilled by the Federal Government,” he said.
He said this when speaking at the UPKO’s 32nd Anniversary Celebration and 17th Triennial Delegates Conference at Hongkod Koisaan Hall, KDCA, here last night. Hajiji said the State Government’s position would continue to be conveyed to the Federal Government, including at the MA63 Technical Committee meeting held in Putrajaya on Aug 3, which was also attended by Deputy Chief Minister III Datuk Ewon Benedick as part of the State Government delegation.
He said 13 claims related to MA63 have been implemented to date, including the regulation of energy, deep-sea fishing licensing and regulation, recognition of the Public Works Department (JKR) and Department of Irrigation and Drainage (JPS) under Treasury Instruction 182, administration of the judiciary in Sabah, administration of Sipadan and Ligitan islands, labour and the environment.
On the 40 per cent entitlement, he said although it has yet to be fully implemented, including with a related appeal by the Federal Government before the Court of Appeal, the Sabah Government has accepted an interim arrangement, under which the payment that was previously only RM26 million has now been increased to RM1.5 billion beginning this year.
“We welcome the Prime Minister’s decision to increase the interim payment, and we will use these funds to build more paved roads in Sabah, construct concrete bridges, improve water and electricity supplies, and implement development and welfare initiatives for the people of Sabah, such as building more Rumah SMJ houses and expanding the Sentuhan Kasih Rakyat (SYUKUR) programme.
“In short, whatever we receive from the Federal Government will be channelled back to the people in various forms of incentives and assistance,” he said.
Meanwhile, Hajiji said the State Government continues to place strong emphasis on financial performance and increasing revenue collection, with annual revenue maintained at RM7 billion since 2022 and expected to rise to RM8 billion this year.
He said the State Government has also strengthened the State’s economic resilience despite various domestic and global challenges, positioning Sabah as a strategic investment destination.
“In 2025 alone, RM7.6 billion in investments in the manufacturing sector was recorded,representing an increase of nearly 208 per cent compared with 2024,” he said.
Hajiji said all these efforts are aimed at building economic prosperity for the people through the creation of employment opportunities for Sabahans and generating economic spillover benefits for micro, small and medium enterprises through high-impact investments in Sabah.
He said that through strategic cooperation with PETRONAS under the Commercial Collaboration Agreement (CCA), the State Government has also succeeded in increasing its equity participation in the exploration and development of Sabah’s oil and gas industry, while creating more opportunities for local Sabah companies to participate in the development of the industry.
“We are finalising the acquisition of a 40 per cent equity stake in a Floating Liquefied Natural Gas (FLNG) facility project in Sabah, as well as a further 30 per cent stake in two new oil and gas fields on the East Coast. God willing, the agreements for these partnerships will be signed in the near future,” he said.
The State Government will also develop new industrial parks, including in Kota Belud, as well as a Blue Economy Hub in Kudat to further boost investment in the State and, in turn, increase activities across the domestic economic value chain.-pr/BNN
