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Kedah and Penang Dispute Over Lease Payment Claims

Published July 29, 2026 at 8:32 AM UTC

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The longstanding disagreement between Malaysia's Kedah and Penang states over lease payments has intensified, drawing attention to constitutional interpretations and inter-state relations.

Since 2018, the federal government has been paying an annual honorarium of RM10 million to Kedah on behalf of Penang. However, Kedah's Sultan, Al Aminul Karim Sultan Sallehuddin Sultan Badlishah, has called for a review of this payment, suggesting it no longer reflects the original intent of the agreement.

Penang's Chief Minister, Chow Kon Yeow, has deferred the matter to the federal government, stating that it is a constitutional issue beyond the state's jurisdiction. He emphasized that Penang has not received any legal correspondence from Kedah regarding the dispute.

Kedah's Menteri Besar, Datuk Seri Muhammad Sanusi Md Nor, has indicated plans to assemble a legal team to address the issue, suggesting potential legal action to clarify the state's position and relationship with Penang.

This dispute underscores the complexities of Malaysia's federal structure and the interpretation of historical agreements. The federal government's role in resolving such inter-state conflicts remains pivotal.