KOTA KINABALU: Sabah leaders have welcomed a four-fold increase in the federal special grant but maintained that they are still pursuing the return of 40% revenue earned by the state.

       The special grant amounting to RM125mil a year was a temporary measure, they said, and should not be regarded as a replacement to the return of 40% revenue to Sabah.

       Chief Minister Datuk Seri Hajiji Noor and his deputies Datuk Seri Dr Jeffrey Kitingan and Datuk Seri Bung Moktar Radin welcomed the increase from RM26.7mil to RM125.6mil annual payment for 2023-2026.

       Hajiji said the negotiations for the return of 40% of revenue earned from the state under the Malaysia Agreement 1963 (MA63) were still ongoing but lauded the special grant as benefiting Sabah’s development.

       Jeffrey deemed the special grant as a temporary measure, adding that it should not jeopardise the claims to the state’s revenue rights as per the Federal Constitution, and that the payment should not be regarded as a replacement of the 40% net revenue return to the state.

       “My view is that the Sabah government and the Federal Government must do a formal financial review every five years as required by Article 112C/112D of the Constitution. The issue of the financial position of the Federal Government should not arise as it has already collected the money; it is more on the financial needs of the state,” Jeffrey, who is Sabah STAR president, said.

       The Deputy Chief Minister added that the RM125mil was not a big amount but still better than the RM26.7mil that the state had been receiving since 1973. He estimated federal revenue from Sabah to be somewhere between RM50bil and RM70bil.

       On Thursday, Prime Minister Datuk Seri Ismail Sabri Yaakob announced that Sabah and Putrajaya had reached a consensus following discussions on the special grant under Article 112D of the Federal Constitution over the past few months. Ismail Sabri said Article 112D on the special grant provision would also be reviewed from time to time to find a new amount that balanced out Sabah’s needs and the Federal Government’s financial status.

       The agreement, he said, was without prejudice and Sabah had the right to also depend on the original formula (40% of the revenue) as stated in Article 112C and Point IV of the 10th Schedule of the Federal Constitution.

       Both state and federal governments had the right to refer the matter to a freelance appraiser if no consensus could be reached as mentioned under Article 112D (6) of the Federal Constitution, the Prime Minister noted.

       “This agreement portrays the Malaysian Family spirit and the commitment of the Federal Government towards Sabah under the Federal Constitution and MA63,” he added.

       In welcoming the increase, Bung also asked for the funds to be given directly to the state and managed by the state government autonomously.