Sarawak reserves at risk, says Chong amid State Budget 2025 ‘Alternative Funding’ concerns

KUCHING (Nov 13): Padungan assemblyman Chong Chieng Jen has voiced concerns about the Sarawak government’s financial practices, urging it to adopt greater caution in public spending and accountability.

While debating the Supply (2025) Bill 2024 during the State Legislative Assembly (DUN) sitting today, he specifically criticised the “Alternative Funding” scheme, which he believes circumvents the traditional budgetary process of the DUN and undermines fiscal transparency.

Chong, a member of the Democratic Action Party (DAP), highlighted that Sarawak’s reserves, painstakingly built up over decades to around RM30 billion, are now at risk due to the government’s reliance on alternative funding.

“The late Tun Pehin Sri Abdul Taib Mahmud and Pehin Sri Adenan Satem dedicated decades to gradually building up Sarawak’s reserves to about RM30 billion. But within just a few years, this administration’s debt levels have already exceeded those long-standing reserves due to massive new expenditures.

“The state’s financial reserves, carefully accumulated through the prudent planning of past leaders, are now at risk as the government continues to fund projects by taking on future debt,” he said.

Chong pointed out that while the recently tabled State Budget 2025 appears healthy and even shows a surplus, it conceals substantial debt incurred through an alternative funding scheme.

This scheme allows the government to undertake massive expenditures outside the approved budget, making it difficult for both the public and lawmakers to fully understand the state’s true fiscal obligations.

“In the State Budget 2025, the government allocated RM4.9 billion for operating expenses and RM10.9 billion for development.

“However, there is a further RM7.46 billion in planned expenditures through alternative funding for major projects, including RM742 million for regional development, RM4 billion for infrastructure projects such as the Sarawak Coastal Road, RM452 million for water treatment plant upgrades, and RM1.42 billion for the Autonomous Rapid Transit (ART) programme.

“This all adds up significantly beyond the approved budget,” he said.

Apart from that, the approach, Chong noted, is not limited to 2025, rather it represents a pattern that began with massive expenditures in 2023 and continued into 2024.

Because of that, he said by the end of 2023, the government had already spent approximately RM7.5 billion on projects financed through alternative funding.

“The trend continued in 2024, with additional allocations for projects including the Second Trunk Road and the Coastal Road Network, bringing the 2024 total under alternative funding to RM7.05 billion.

“This brings the cumulative spending through alternative funding in the past three years to a staggering RM21 billion,” he said.

Chong also raised the question of how the government is financing this scheme, pointing to significant loans secured through various state-owned companies.

He said the government has relied on loans from financial institutions, including DBOS and others, to fund these alternative expenditures.

“Loans obtained through entities such as Infrasar Ventures Sdn Bhd, Infrasar Dua Sdn Bhd, and Equisar Capital Sdn Bhd total approximately RM30 billion, with an additional US$800 million (about RM3.6 bln) due in 2026,” he said.

Chong thus expressed deep concerns over the financial strain these debts could impose on future budgets, noting that they are essentially mortgaging the future for present-day projects without full transparency.

Thus for him, there is a need for the government to stop circumventing the budget approval process and adhere to a more transparent and fiscally responsible approach to protect Sarawak’s long-term financial stability.