Photo caption – Brian Ho said federal allocations should create more business opportunities for local enterprises while helping them reduce operating costs.
KOTA KINABALU: Sabah’s increased federal allocation under Budget 2027 presents an opportunity to strengthen the state’s business environment, but the real measure of success lies in how effectively the funding translates into lower operating costs, new business opportunities and greater participation by local small and medium-sized enterprises (SMEs).
Malaysia-China Chamber of Commerce (MCCC) Sabah Director of Commercial Affairs Brian Ho said infrastructure spending should be assessed not merely by the number of projects completed, but by the economic benefits these investments deliver to businesses and the wider community.
Under the leadership of MCCC Sabah President Datuk Dexter Lau, the chamber believes that infrastructure development should go hand in hand with efforts to strengthen local supply chains and create more opportunities for Sabah businesses to participate in economic growth.
When tabling Budget 2027, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced that Sabah would receive RM18.7 billion in federal allocations, up from RM17.6 billion this year. Sarawak’s allocation will rise to RM16.2 billion from RM15.1 billion. The government has also set aside RM3.3 billion for road projects in both states.
Brian noted that transportation challenges often create costs that extend well beyond fuel and freight charges. Unpredictable delivery times can force businesses to hold larger inventories, incur additional warehousing expenses and contend with product spoilage or missed delivery schedules.
These pressures are particularly significant for businesses dealing in food, essential goods and perishable agricultural produce, where delays can affect product quality, stock availability and profit margins.
He said improved road connectivity between agricultural areas, processing facilities, industrial zones, warehouses and major markets could help businesses manage inventory more efficiently, reduce wastage and improve delivery reliability.
Rather than focusing exclusively on road mileage or the scale of construction, he suggested that infrastructure planning should also consider actual freight movement and identify bottlenecks that have the greatest impact on business operations.
Regular consultations with chambers of commerce, industry associations and local businesses could help the authorities identify these priorities before projects are finalised. This would allow public investment to address practical commercial challenges instead of leaving businesses to navigate gaps in connectivity and supporting facilities.
Brian also highlighted the potential for major infrastructure projects to generate business beyond the construction sector itself. Demand for building materials, machinery rental, transportation, equipment maintenance, catering and accommodation could create opportunities for local suppliers and service providers.
To help Sabah SMEs compete for these opportunities, he proposed that the relevant authorities provide earlier access to tender schedules, procurement requirements and supplier registration procedures. With better visibility of upcoming projects, businesses would have more time to arrange financing, secure equipment and form partnerships with experienced contractors.
Smaller companies that are not yet equipped to handle major contracts could also participate through subcontracting arrangements or joint bids, enabling them to build experience, strengthen their capabilities and gradually take on larger projects.
He stressed that expanding local participation should not mean compromising quality or procurement standards. Instead, a more transparent and accessible procurement process would help qualified Sabah businesses compete fairly and retain a greater share of the economic activity generated by public investment.
He further proposed that the government assess completed projects against practical indicators, including changes in freight costs, delivery times, local supplier participation and business activity in surrounding areas. Such information would help determine whether infrastructure spending is delivering the intended economic benefits and guide decisions on future investments.
Brian said Sabah’s increased federal allocation should ultimately be judged by whether businesses become more competitive, supply chains operate more efficiently and local SMEs gain sustainable opportunities to grow.
By linking infrastructure development more closely with the needs of industry, he said, the state could ensure that public investment delivers benefits extending beyond construction and contributes to stronger, more resilient local businesses.
