Prime Minister Ismail Sabri Yaakob also said this amount will increase every year for the 2023 to 2026 period, according to a rate jointly agreed by Putrajaya and the Sabah government.

Ismail said this decision came after the federal and state governments reached a consensus on reviewing the special grant to Sabah under Article 112D of the Federal Constitution.

“At the same time, the federal and Sabah governments will continue negotiating Sabah’s demand for 40% of revenue from Sabah and reviewing the special grant under Article 112D.

“This is to agree on a new special grant amount that can balance Sabah’s needs without affecting the federal government’s financial position,” the prime minister said.

If both sides could agree on the new figure before 2026, he said the amount would replace that of the special grants paid to Sabah from 2022.

Ismail added that both the federal and state governments had the right to refer the matter to an independent appraiser if they failed to reach a consensus, as stated under Article 112D(6).

He said the consensus on the special grant reflected Putrajaya’s commitment to the Federal Constitution and the Malaysia Agreement 1963.

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