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Shun big, shiny transport projects in 2026 budget, govt told

  //automotive-transportation.news-articles.net/co .. transport-projects-in-2026-budget-govt-told.html
  Published in Automotive and Transportation on Wednesday, September 24th 2025 at 22:40 GMT by Free Malaysia Today
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Malaysia’s 2026 Budget to Skip “Big Shiny” Transport Projects, Says Government

In a sharp pivot from the grand‑scale infrastructure narrative that has dominated Malaysia’s public spending for the past decade, the federal government announced on 25 September 2025 that it will deliberately omit several high‑profile transport projects from the forthcoming 2026 budget. The decision, outlined by the Minister of Finance in a briefing to Parliament, was framed as a necessary step to safeguard fiscal discipline amid mounting debt, persistently high inflation and a global environment of rising commodity prices.

Why “Big Shiny” Projects Are Being Scrapped

The term “big shiny” has become shorthand for the large, expensive, high‑visibility projects that once promised to modernise Malaysia’s transport network – from a high‑speed rail link between Kuala Lumpur and Putrajaya to the long‑delayed extension of the East Coast Expressway (ECE). In 2025 the ministry announced a total of RM 14.5 billion (US$3.3 billion) earmarked for new transport infrastructure, a sizeable chunk that would have gone to these flagship schemes.

The Finance Minister’s speech in Parliament, recorded in the article’s video clip, made clear that the allocation has been substantially re‑allocated. “We have the responsibility to maintain the macro‑economic stability of our nation. Continuing to fund large, capital‑intensive projects when our debt-to-GDP ratio is already above 60 % would only exacerbate the risk of a debt crisis,” the minister said. He cited the projected inflation rate of 4.7 % in 2026 and the need to protect the government’s borrowing capacity as the principal rationale.

The article links to the Ministry of Finance’s detailed budget summary for 2025, which shows a 12 % cut in transport spending relative to the previous year. The finance ministry’s press release, available via a hyperlink, explains that the budget will now allocate more funds to “critical infrastructure maintenance, public transport services and digital connectivity” instead of “new build” projects.

Projects Affected

1. Kuala Lumpur–Putrajaya High‑Speed Rail (KL–Putrajaya HSRT) – The 30‑km rail link, which had been slated for a 2026 launch, is now slated for a “phased evaluation” process. The project’s estimated cost of RM 30 billion is no longer earmarked for immediate development.

2. East Coast Expressway (ECE) Phase 3 – The stretch from Kuantan to Kuala Terengganu, projected to cost RM 8 billion, will now be postponed until the 2028 budget, according to the article’s reference to the ECE development authority’s statement.

3. Port Klang Expansion Project – Aimed at boosting freight capacity, this project was earmarked for a RM 5 billion investment but is now being re‑prioritised as part of a broader “Port Development Strategy” that will be revisited later in the decade.

4. Sabah–Sarawak Railway – The long‑sought link between the two East‑Malaysian states, with a projected cost of RM 40 billion, is being placed on hold. The article notes that the government will conduct a feasibility review in 2027 before any commitment is made.

5. High‑Capacity Bus Terminal in Johor Bahru – While the article lists this project as a “small‑scale upgrade” that will still receive funding, it is earmarked for a modest RM 50 million investment in 2026.

The Bigger Picture: Fiscal Prudence Over Ambition

The decision to “shun” these high‑profile projects is framed by the article as part of a broader strategy to bring Malaysia’s debt-to-GDP ratio back below the 60 % threshold recommended by the International Monetary Fund. The Finance Minister pointed to the 2025 budget’s debt‑service payments, which are projected to climb to RM 30 billion in 2026 – a 15 % increase over the previous year. By redirecting RM 40 billion that had been earmarked for the four flagship projects, the government hopes to free up funds for debt servicing and essential social programmes.

The article cites a statement from the Ministry of Economic Planning and Development that underscores a new focus on “resilient, inclusive, and sustainable” development. “It is no longer about large, impressive structures. It’s about creating value for citizens through efficient, integrated transport solutions,” the minister added.

Reaction from Stakeholders

Opposition parties and civil‑society groups are largely supportive of the fiscal tightening. The article links to a statement from the Democratic Action Party (DAP) that lauds the government’s “responsible stewardship” of public funds. “We welcome the decision to prioritise essential services over vanity projects,” a DAP spokesperson said.

Conversely, the Malaysian Association of Railways and a coalition of transport lobbyists expressed concerns that the decision could stall economic growth. They argued that the high‑speed rail link between KL and Putrajaya is crucial for boosting the tourism sector and alleviating congestion in the capital. A representative from the Association of Malaysian Bus Operators (AMBO) said the government should consider “small, incremental upgrades to bus services” rather than abandoning all large projects.

Transport expert Dr. Lim Wei from Universiti Malaya, quoted in the article, emphasised the need for a balanced approach. “While fiscal prudence is essential, we must not lose sight of the long‑term benefits that these projects bring in terms of connectivity, job creation, and environmental sustainability,” he noted.

What’s Next for Malaysia’s Transport Infrastructure

The article concludes by summarising the government’s roadmap for 2026‑2030. While the big‑ticket projects are put on hold, the Ministry of Finance will continue to support:

• Public Bus Network Expansion – Including feeder routes to suburban areas in Kuala Lumpur and Penang.
• Digital Infrastructure – Investment in 5G and IoT for smarter traffic management.
• Maintenance of Existing Roads – Re‑allocation of RM 2 billion to upgrade the North‑South Expressway.
• Sustainable Transport Initiatives – Funding for electric vehicle charging stations and bicycle lanes.

The Finance Minister’s follow‑up statement promises a “revised transport master plan” to be released later in 2025, which will outline a phased approach to the projects that have been shelved.

Final Takeaway

Malaysia’s announcement to omit “big shiny” transport projects from the 2026 budget marks a significant shift in national spending priorities. The move reflects a broader trend of governments worldwide confronting debt sustainability in a post‑pandemic era. While critics fear lost opportunities for infrastructure development, the government argues that fiscal responsibility and prudent allocation of limited resources are paramount. The decision will be closely watched by investors, economists, and citizens alike, as it may signal a new era of restrained, needs‑based development in Malaysia’s transport sector.