DEBATE ON PRESIDENT'S ADDRESS

Debate resumed.

Prof. Jayakumar: Points of Agreement. Mr Speaker, Sir, some Members have asked about reports in both the local press and in the Malaysian press over the Malayan Railway lands in Singapore. They asked if it is true that we were creating difficulties. They also noted that the Singapore Government had recently replied to the New Straits Times and that we had also replied to a letter from KTMB published in the Straits Times. And they wanted to know what is the background to these reports and several Members have also asked for details of the Points of Agreement.

So, first of all, what are the Points of Agreement? Sir, it is a Government-to-Government agreement between Malaysia and Singapore concerning railway lands in Singapore. The POA was signed on 27th November 1990 by the then Prime Minister Lee Kuan Yew on behalf of Singapore and the then Malaysian Minister of Finance, Tun Daim Zainuddin, on behalf of Malaysia. The POA was signed on the same day that Prime Minister Lee handed over the premiership to Mr Goh Chok Tong.

Background to the POA

Before I take Members through the provisions of the POA, Members may wish to know the context in which the POA was concluded.

Sir, the Malayan Railway Administration (MRA), now Keretapi Tanah Melayu Bhd (KTMB), operates a railway on about 200 hectares of land in Singapore. Of this, 140 hectares (or 70%) of the land are held by the Federal Lands Commissioner on 999-year leases. These leases contain covenants which restrict the use of the land for railway purposes only and which also prevent the lessee from transferring the land other than for the purposes of MRA. If these covenants are breached, the Singapore Government is entitled to resume the lands in accordance with the terms of the leases.

In 1984, Malaysia asked Singapore if we had any special plans for the Malayan Railway land in Tanjong Pagar as Malaysia was thinking of stopping the railway at Woodlands and either selling or developing the property in Tanjong Pagar.

We responded that we preferred the MRA to continue to use the land at Tanjong Pagar for railway purposes. However, if MRA did not want the land because it wanted to terminate the services at Woodlands, Singapore was prepared to take the land back in accordance with the leases of the various parcels.

That was where the matter stood till the late 80s.

Mr Lee Kuan Yew relinquishing the Premiership to Mr Goh Chok Tong

The General Elections in 1984 and 1988 were a watershed in Singapore politics. After the 1988 elections, Mr Lee Kuan Yew handed over the reins to the second generation of leaders. As Prime Minister Goh explained to this House on 13th June 1990, Mr Lee's main preoccupation at that time was to settle all outstanding bilateral issues so that the second generation leaders would not be saddled with the baggage of the past and fettered with the old mode of thinking.

One significant development in this regard was the 28th June 1988 Memorandum of Understanding between Prime Minister Lee Kuan Yew and Prime Minister Mahathir of Malaysia on water, natural gas and the Changi ferry service. This MOU then paved the way for the 1990 Water Agreement on Linggiu Dam signed on 24th November 1990 by PUB and the Johor State Government in the presence of Prime Minister Lee Kuan Yew and Prime Minister Mahathir.

Our plan to move the CIQ to Woodlands

Amidst these developments, Singapore was also concerned, Sir, over the trafficking of drugs from across the Causeway. Passengers arriving by rail were not cleared (they are not cleared even today) at the checkpoint in Woodlands, which is the first point of entry into Singapore, but only cleared when they reached Tanjong Pagar. We had discovered cases of drugs being thrown out of trains before they arrived at Tanjong Pagar. Illegal immigrants also frequently jumped off trains before they reached Tanjong Pagar. Although the Police maintained vigilance, it was impossible to station officers all along the line. We could not allow this situation to persist. The Government therefore decided in September 1989 to shift our own, that is, Singapore Customs, Immigration and Quarantine (CIQ) facilities from Tanjong Pagar to the Woodlands Checkpoint.

Sir, our decision to shift our CIQ was independent of any decision by the Malaysians to move their railway station to Woodlands. But in our assessment, it makes sense for the railway to terminate at Woodlands. As I mentioned earlier, the Malaysians had also indicated in 1984 that they were thinking of stopping the railway at Woodlands and either selling or developing the property in Tanjong Pagar. But we knew, Sir, that they were concerned that this would cause all MRA lands south of Woodlands to revert to Singapore Government as they would no longer be used for railway purposes.

Therefore, one possible approach was for Singapore to allow the Malaysians to redevelop some parcels of the MRA land so that they could be redeveloped independently, especially the site at Tanjong Pagar, and for Singapore to share in the gain from this redevelopment. The lands which could not be redeveloped would revert to Singapore. This would be a win-win arrangement.

Roots of the POA

Mr Lee Kuan Yew then put a proposition to Tun Daim Zainuddin. He informed Tun Daim that most of the MRA lands in Singapore (with the exception of three plots in Woodlands, Kranji and Keppel) were narrow strips and not capable of independent development. If the MRA decided to terminate its line at the new Woodlands Checkpoint, then notwithstanding the restrictive covenant, the plots at Keppel, Kranji and Woodlands could be realienated to a company which would be owned 50%:50% by nominees of Singapore and Malaysia. There would be no compensation for the other MRA lands which were resumed. Prime Minister Lee explained to Tun Daim that the land exchange should be limited to only these three parcels of land. The other plots, including the tracks, could not be included as it could otherwise lead to endless problems and arguments between Malaysia and Singapore in the future on whether these portions were capable of being developed.

Malaysia wanted the railway station to terminate at Bukit Timah, and not Woodlands. Mr Lee agreed to this. But he proposed that the Bukit Timah station be economically built because in the longer term, Woodlands would be a better site. Malaysia also wanted a larger share in the joint venture company, larger than 50%. PM Lee agreed to 60:40 in Malaysia's favour.

After further negotiations, the Points of Agreement was signed by Prime Minister Lee Kuan Yew and Tun Daim on 27th November 1990.

Terms of the Agreement

Mr Speaker, Sir, I have given to the Clerk of Parliament a copy of the full text of the POA with all the attached plans and annexes and, with your permission, Sir, I would request that it be placed on record and Members be allowed to inspect it in the Library of this House. Sir, I have given extracts of the Agreement to the Clerk of Parliament and, with your permission, I would request him to distribute it to Members so that they could follow the rest of what I have to say. [Copies of POA distributed to hon. Members.]

Point (1) of the Agreement states that the station at Keppel will be vacated and moved from Keppel, in the first instance to Lot 76-2, which is next to the Upper Bukit Timah Fire Station along Upper Bukit Timah Road near the junction with Jurong Road. The Government of Singapore will help in the alienation of such lands as may be reasonably necessary for the development of the station, provided that it is not necessary to acquire land which in the opinion of MRA and the Government of Singapore has major permanent structures on it. When MRA wants to acquire despite the Government of Singapore's view that there are major permanent structures, then the acquisition will be at market price.

Point (2) stipulates that the land at Keppel will be vested in a limited company (M-S Pte Ltd) to be developed as residential and commercial land in accordance with our zoning plans.

Point (3) specifies that when the MRT reaches Woodlands New Town, the MRA may, within five years, move its station from Lot 76-2 to a site in Woodlands adjacent or close to the MRT station. Then the two pieces of land, one in Kranji and in Woodlands, will be vested in the limited company, M-S Pte Ltd, and developed in accordance with the plans given.

Point (4) goes on to specify that Singapore's Land Office will issue freehold land titles to M-S Pte Ltd in respect of the lands at Keppel, Kranji and Woodlands.

Point (5) defines that 60% of the shares of the limited company, M-S Pte Ltd, will be owned by a company to be designated by the Government of Malaysia; and 40% of the shares by a company to be designated by the Government of Singapore. Payment for the development costs of these properties will similarly be shared in the ratio of 60:40.

Point (6) goes on to say that there will be no compensation for the MRA land. Instead the three big pieces will be realienated to M-S Pte Ltd at no cost. Whoever takes the land should clear the tracks and also pay for the costs of resettlement of squatters. Therefore, the cost of clearing tracks and squatters for the three pieces of land will be on M-S Pte Ltd. For the balance of the MRA lands, the cost of clearance of tracks and squatters will be on the Singapore Government.

Point (7) states that in exchange for the MRA land at Keppel, a plot of land of equivalent value in Marina South will be offered to M-S Pte Ltd so that a prestigious building can be developed on this Marina site. M-S Pte Ltd intends to develop and retain a prestigious building as a long term investment. If the land offered to M-S Pte Ltd is, in the opinion of M-S Pte Ltd, not suitable, then alternative sites in Marina South of equivalent value shall be offered to M-S Pte Ltd.

Sir, there is also an Appendix to the POA which states that the station to be built at Upper Bukit Timah at Lot 76-2 should be economically built until, in MRA's judgment, Upper Bukit Timah Road is the best long term location for the station. The Appendix also says that in Singapore's judgment, the better long term location of the station for most economic benefits is either in Woodlands or in Johor Bahru. Hence, the proposed MRA station in Upper Bukit Timah Road should be economically built. The Appendix also states that MRA may conclude that it is better to move the station in the first instance to Woodlands. When the MRT extends from Woodlands to Johor Bahru, the MRA station can obtain economic benefits by moving to Johor Bahru.

Mr Speaker, Sir, those are the key provisions of the POA. The effect of this Agreement is that when the Tanjong Pagar station is relocated to Upper Bukit Timah, all railway lands south of Bukit Timah other than the Tanjong Pagar site will revert to Singapore. When the station is shifted to Woodlands, all the railway lands south of Woodlands other than the Tanjong Pagar, Woodlands and Kranji sites will revert to Singapore.

The land exchange contained within the POA, particularly the Kranji and Woodlands plots, was an incentive to encourage the Malaysians to move to Woodlands. At the time, the New Straits Times hailed the signing of the POA as "the best thing that could happen to further cement economic ties between the two countries".

Sir, let me turn to the problems encountered in implementing the POA. For four years after signing the POA, the Singapore Government worked with Malaysia to implement the POA. However, after signing the Government-to-Government Agreement, the Malaysians made requests which departed from the POA.

For example, the Malaysians wanted to retain certain developable lands outside the railway corridor which they considered capable of development, other than Keppel, Kranji and Woodlands. They later also asked to include a commercial/ shopping complex in the Bukit Timah station and for four more parcels of land in exchange for moving straight to Woodlands. Singapore was also approached on whether we would agree to develop the Bukit Timah site on a 60:40 basis if MRA relocated its station straight to Woodlands.

Singapore's position was that the terms of the POA were clear and had to be adhered to. According to the POA, three and only three parcels of land at Keppel, Kranji and Woodlands had been agreed for joint development. All other MRA lands would be returned to Singapore without compensation. There was no provision in the POA for 60:40 joint development of the Bukit Timah site. The Bukit Timah station was also to be built economically. If Malaysia found the station at Bukit Timah unsuitable, the land and the station would revert to Singapore under the terms of the POA.

Sir, in December 1993, Tun Daim Zainuddin wrote to Senior Minister and proposed that:

`as the land area at Bukit Timah is substantial, it should be shared on 60:40 basis which is the same ratio for the rest of the parcels of land which we had agreed to develop. I think it is fair. If this is agreed, then Railway will consider moving straight to Woodlands.'

Senior Minister replied to Tun Daim in January 1994 to point out that the terms of the POA were very clear and under those terms, the land at Bukit Timah was not among those lands to be jointly developed. Senior Minister in his reply said:

`As long as the station was in Bukit Timah, the other two large pieces of land in Kranji and Woodlands could not be developed. . Only when Malaysia had vacated the Bukit Timah railway station, would these two pieces at Kranji and Woodlands be developed. Point 3 of the Points of Agreement gave Malaysia the option to move the station to Woodlands within five years of the MRT reaching Woodlands.'

`In other words we had agreed on strong incentives for the station to move to Woodlands. At the time of the agreement in November 1990, I knew that KTM would sooner or later have to move to Woodlands. The old Bukit Timah trunk road was being replaced by a new island-wide network of expressways. The Bukit Timah area has no MRT and is becoming a low rise residential area.'

The letter went on to say:

`I believe that I was fair when I agreed to Malaysia's 60% and to Singapore's 40% share, in developing the three major pieces of land. Some in the Cabinet thought that I was generous and should have stuck to the 50:50% formula. I favoured an agreement because I did not want this problem to trouble relations between the two countries later.'

Mr Speaker, Sir, some Members have referred to the recent replies from the Singapore Government in the New Straits Times and the Straits Times on matters concerning the POA. These replies were necessary because on both occasions, erroneous accounts of the POA and developments subsequent to it had been published. We had to respond in order to set out both the facts as well as the correct legal position.

As for the New Straits Times' article and our reply, on 19th March 1997, the New Straits Times carried a story, "Differences hold up plan to develop KTM's Singapore land". The article gave an inaccurate account of the POA. For example, the article claimed that lands in Kranji, Woodlands and Tanjong Pagar would be handed over to KTMB when the station moved to Bukit Timah, and that the land exchange offered in Marina South was not on par with the land in Tanjong Pagar.

Accordingly, the Permanent Secretary of the Ministry of National Development, Mr Lam Chuan Leong, wrote to the New Straits Times to point out these inaccuracies and set out the main terms of the POA. However, in carrying our reply, the New Straits Times edited out one key point and refused to make the necessary corrections as communicated in writing by the Permanent Secretary (National Development).

The New Straits Times also refused to accept an advertisement by the Singapore Government to point out that NST had edited out letters without our consent. We therefore had to buy advertising space in the Straits Times in Singapore on 15th May 1997 to put our clarification on record.

As for the reply in the Straits Times, let me refer to the letter by the Managing Director of KTMB, Dato Abdul Rahim Osman, which appeared in the Straits Times of 13th May 1997. That letter claimed that the Agreement, ie, the POA, "would be operative only upon Malaysia initiating what is agreed upon". That is to say:

(a) The POA is not yet operative; and

(b) The POA would only come into force when the Malaysian government unilaterally decides to initiate what is agreed upon, ie, to vacate its railway station in Tanjong Pagar.

Our Attorney-General has advised us that this is clearly not so. Accordingly, the Permanent Secretary of the Ministry of Law, Mr Goh Kim Leong, replied on 26th May 1997 to set out the correct legal position. In his reply, Mr Goh Kim Leong pointed out that:

`The Points of Agreement is a government to government agreement between Singapore and Malaysia which took effect and became operative on 27th November 1990, the day that it was signed by Mr Lee Kuan Yew on behalf of the Government of Singapore and Tun Daim Zainuddin on behalf of the Government of Malaysia.'

`It is an established principle of law that where an agreement does not stipulate a fixed date for performance, it has to be performed within a reasonable time. This principle applies to the 1990 Agreement, with Point (3) of the Agreement delimiting the maximum period for the railway station to be moved from Keppel, that is within five years from the time the MRT reaches Woodlands New Town, which it did on February 10th, 1996.'

Sir, in conclusion, the POA was an agreement concluded by the two Governments after careful deliberation by both sides. It is an internationally binding Agreement which should be implemented in good faith. I have taken some time to spell out the background, the details and the terms of the Agreement because we have to place on record that Singapore has adhered to the terms of the Agreement.

Mr Speaker, Sir, in closing, let me say that Prime Minister Goh Chok Tong strongly believes in close cooperation between Singapore and Malaysia for mutual benefit. While the Prime Minister and the Singapore Government are bound by the terms of the POA, Mr Goh has made strenuous efforts to move the bilateral relationship forward in a way that could overcome the problems posed by the Malaysian Government's desire to change the POA. He has therefore proposed his Framework for Wider Cooperation, a subject which, I understand, he will elaborate when he takes the floor now.

Mr Low Thia Khiang: Sir, may I seek clarification from the Minister for Foreign Affairs? After hearing his explanation on the KTMB land and the agreement, I wonder whether the Minister for Foreign Affairs would offer some suggestions as to why the Prime Minister of Malaysia, Dr Mahathir, accused the Singapore Government of putting pressure on them?

Prof. Jayakumar: Sir, it might be better for the Member for Hougang to hear out what Prime Minister Goh has to say, and if he still has questions after that, I am sure both of us will be very happy to respond to his questions.

The Prime Minister (Mr Goh Chok Tong): Mr Speaker, Sir, the Minister for Law has just given us the background to the Points of Agreement (POA), and explained the difficulties in working the agreement. These difficulties are part of the reasons behind the current strain in Malaysia-Singapore relations.

Let me add to what Minister Jayakumar has said, but first let me bring you back to June 1990. I told the House then (I was then Deputy Prime Minister) that I had asked Prime Minister Lee Kuan Yew to "settle old accounts as I prefer to open a new era unfettered by old thinking". By that, I meant settling outstanding issues like the railway land. I wanted a clean slate on which new relations free from historical and emotional baggage could be written.

It was for this reason that Mr Lee wrapped up the negotiations on the Malayan Railway land before he stepped down as Prime Minister. In fact, he signed the "Points of Agreement on Malayan Railway Land in Singapore" with the then Malaysian Finance Minister, Tun Daim Zainuddin, as his very last act in office on the day he retired as Prime Minister, ie, 27th November 1990. He did so with my full support.

The POA provided for Singapore and Malaysia to set up a joint venture company, M-S Pte Ltd, to jointly develop three parcels of Malayan Railway land, in Tanjong Pagar, Kranji and Woodlands. Malaysia would have a 60% share, and Singapore 40%. We wanted Malaysia to have a significant long term stake in Singapore as this would give both sides an abiding interest in good bilateral relations, and in the prosperity and success of the other. The proposed high quality property developments by M-S Pte Ltd would give Malaysia such a stake.

I subsequently learnt that Dr Mahathir was unhappy that the Malayan Railway land at Bukit Timah had not been included for joint development in the POA. But I could not simply set aside the POA. The POA was a formal agreement between two countries that had been signed by Tun Daim and Mr Lee Kuan Yew on behalf of both Governments.

Meeting on 28th October 1991 in Harare

About a year after the signing of the POA, I met Dr Mahathir in Harare in October 1991. That was when I had my first inkling of problems with the POA. Dr Mahathir stated that he would like to develop commercially the MRA land at Bukit Timah, something not provided for in the POA. His idea was to use the station and the railway track to Jurong for a few years. After that when the Bukit Timah railway station was no longer required, the station could be shifted to Woodlands. I suggested that it was commercially more viable to shift the railway station to Woodlands in one step instead of two steps. I added that we had decided to extend our MRT to Woodlands and if the railway station were to be built at Bukit Timah, it might have to relocate to Woodlands in just a matter of years.

Meeting on 6th September 1994 in Langkawi

Three years later, in September 1994, I called on Dr Mahathir in Langkawi. Again, he raised the commercial development of the Bukit Timah site. I replied that I could not deviate from the terms spelt out in the POA, which did not allow for the joint development of the Bukit Timah site. I said that it was clear from the POA that other than the three specified parcels, the Bukit Timah site and remaining Malayan Railway land would be returned to Singapore. I left that meeting disturbed and worried that things were not going right on the issue of the Malayan Railway land. I gave considerable thought to ways to overcome the problem.

Meeting on 2nd December 1995 in Singapore

The opportunity came when Dr Mahathir visited Singapore and called on me on 2nd December 1995. He presented his vision of a fast inter-city electric train that would run from Singapore to Kuala Lumpur to Kunming. He wanted to keep the railway station at Tanjong Pagar.

I was supportive of his proposal for a city to city fast train link. All great cities in Europe are linked by fast trains. Travelling by train from city to city is convenient and popular. A fast train link between Singapore and Kuala Lumpur would be an attractive and viable alternative to air and road travel.

I gave Dr Mahathir my full support for his proposed electric train project. However, I explained that I had to act within the terms of the POA, which governed all issues affecting KTM land in Singapore. (KTM is the new corporate name for Malayan Railway.) I pointed out that the electric train service would require a variation of the POA.

I further explained that I could overcome the political and legal difficulties of varying the POA only within a framework of wider cooperation between Singapore and Malaysia. I recalled his "prosper-thy-neighbour" philosophy and said that the framework could include Malaysia selling Singapore water for the long term, ie, beyond 2061 when the second Water Agreement with Johor expires. My idea was that with a new water agreement, I would be able to overcome whatever difficulties posed by the POA for the electric train. I felt confident that this would enable me to convince my Cabinet, and later Parliament, to vary the terms of the POA to meet Malaysia's needs for the electric train.

Meeting on 15th December 1995 in Bangkok

Two weeks later, I met Dr Mahathir again on 15th December 1995 in Bangkok at the ASEAN Summit. At our bilateral meeting, I informed him that my Cabinet was supportive of the electric proposal within a framework of wider cooperation.

I proposed that this framework of wider cooperation could include a long term indefinite supply of water to Singapore. Once this was agreed upon, Malaysia could decide on the terminal point of the new railway in Singapore within its railway lands. The terminal point could be at Tanjong Pagar, as Dr Mahathir wanted. But should Malaysia decide to move the railway station from Tanjong Pagar to Woodlands, the Singapore Government, notwithstanding the terms of the POA, would agree to the joint development of KTM land in Bukit Timah, in addition to the agreed three parcels of land referred to in the POA. Dr Mahathir replied that he would look at the matter closely. Meeting on 2nd March 1996 in Bangkok

Dr Mahathir and I next met in Bangkok on 2nd March 1996. The setting was the inaugural ASEM meeting (Asia-Europe Meeting). At our bilateral meeting, I emphasised that our cooperation on the electric train project and the long term supply of water would serve as two important symbols in bilateral relations. I told him candidly that although water was not an immediate issue for Singapore, an agreement by Malaysia to meet Singapore's long term water needs beyond the life of the present water agreements would remove the perception in Singapore that water may be used as a leverage against Singapore. It would be a powerful signal that our two countries are embarking on a new era of cooperation. I explained that a new water agreement would help me to overcome the political objections and the legal restrictions posed by the POA. However, I acknowledged that Malaysia had to ascertain first that it has enough water to meet its own long term requirements.

I also used the opportunity to inform him that we could not allow the building of gantries or catenaries for the electric train. The Singapore Government had not allowed even its own MRT to build gantries above ground because they would be an eyesore in a city state like Singapore.

PM's letter to Dr Mahathir dated 18th March 1996

Immediately after our meeting, Dr Mahathir spoke to the Singapore and Malaysian press. He told them that Malaysia was ready to study how it could supply water to Singapore if it had enough to meet its own long term requirements. I wrote to Dr Mahathir on 18th March 1996 to follow up, and to express my appreciation for what he had told the press.

Dr Mahathir's reply to PM dated 1st April 1996

In his reply on 1st April 1996, Dr Mahathir assured me that Malaysia was prepared to supply Singapore with water if its water resources are in excess of its growing needs. He also said that he had instructed KTM to minimise the use of gantries and level crossings by using a third rail and either overhead or underground crossings. He recognised that this could increase costs but aesthetic considerations must be given every importance.

Meeting on 24th November 1996: A fresh approach

When I next met Dr Mahathir during the APEC Leaders Summit in Manila on 24th November 1996, I reaffirmed that it was for him to decide if he wanted the train station for the new electric railway to remain in Tanjong Pagar. But I also suggested that Tanjong Pagar is not a suitable site for the fast train service. The station at Tanjong Pagar is scruffy, hemmed in by a flyover and the container docks in front. There is limited room for expansion. More importantly, the city centre had already moved away from Tanjong Pagar. I proposed a fresh approach. I offered three alternative sites for the Tanjong Pagar train station and a new train route. These sites are at Newton, Suntec City near Marina Centre and Marina South. I felt that any of these three sites was superior to Tanjong Pagar. Dr Mahathir agreed to consider these three alternatives. The new train route would also free the three parcels of land under the POA plus the Bukit Timah land for joint development.

PM's letter to Dr Mahathir dated 21st December 1996

I wrote to Dr Mahathir on 21st December 1996 elaborating on the idea of alternative stations to Tanjong Pagar. I said that Singapore would contribute significantly to the cost of building the new infrastructure - the new station, a new train route - if it was better than the existing route - and the third rail in place of catenaries. Singapore would invest in the infrastructure for the Singapore sector to help make the fast train service financially viable.

A group of Malaysian officials came to Singapore in February 1997 to view the three alternative sites.

Recap of why we could not agree to Malaysia's proposed electric train project

Mr Speaker, Sir, to put things in perspective, let me explain why we could not agree to Malaysia's electric train project on the terms originally proposed.

First, under the POA, both sides have agreed that Malayan Railway would vacate Tanjong Pagar. Therefore, the proposal for the new electric train service to the station at Tanjong Pagar was inconsistent with the POA.

Second, because electrification of the existing railway would mean extensive changes, the electric train service would amount to a new railway. Under the Railways Act, Parliament's approval has to be granted before the new train service can begin. Under section 3 of the Railways Act, the Malaysians would first have to deposit their railway scheme with the Secretary to the Cabinet. The President, on the advice of the Cabinet, can then provisionally approve or reject the railway proposal. If the President approved, details of the scheme must be deposited with the Chief Surveyor for public inspections and objections within three months. Next, the plans and the objections, if any, have to be presented to Parliament and considered and approved or amended by Parliament.

Third, the overhead catenary system proposed by the Malaysians is unsuitable for a densely built up city like Singapore. It is against our planning rules. The Singapore Government has spent millions of dollars to bury all our telephone and power cables underground. It has not allowed the Mass Rapid Transit and the Light Rail Transit to use overhead cables for aesthetic and safety reasons. The catenary system uses a very high voltage of 25,000 volts. This poses a safety risk and causes extensive electromagnetic interference in the surrounding areas. We had thus proposed the use of a third rail system which is visually less intrusive and allows for a smooth ride given the operating speeds here. I would like to add that for the same reasons, trains in Europe commonly use the catenary system in the countryside and switch to the third rail system in the city.

Fourth, the Malaysian proposal as conveyed in writing by Malaysian officials actually described a commuter train from Tanjong Pagar to Kulai, with intermediate stops in Singapore, and not a high speed electric train from city centre in Singapore to city centre in Kuala Lumpur as envisaged by Dr Mahathir.

Conclusion on POA

Mr Speaker, Sir, the framework of wider cooperation I proposed to Dr Mahathir is designed to overcome the difficulties I had highlighted. I want good relations with Malaysia. I wish to be helpful. But it is not possible for me, or for any Prime Minister of Singapore, to simply set aside the POA which is an international agreement solemnly entered into between two Governments. To do so would undermine the sanctity of all the agreements and treaties Singapore has concluded in the past or will sign in the future. However, provided there is a framework of wider cooperation which includes long-term indefinite supply of water to Singapore, I believe I will have a convincing reason to carry my Cabinet colleagues, Parliament, and the people of Singapore, first, to vary the POA to meet Malaysia's requirements, and, second, to invest in the Singapore sector of the infrastructure for the high speed train to help make the train service financially viable.

I believe both countries have much to gain by working together for mutual benefit. I firmly believe that neighbours must live together in harmony and help each other to do better and improve the standard of living of their people. If Singapore and Malaysia can embark on a new era of cooperation, we will signal to the present and future generations that we have discarded the old historical and emotional baggage in favour of fruitful, mutually beneficial cooperation. Mr Chiam See Tong's proposal of an economic union with Malaysia is not as ridiculous as it sounds. He got his economic history of our Malaysia days wrong, and he has ignored important non-economic factors, but the economic logic of his proposal is correct. However, cooperation takes two willing parties. I do not think this is the right time to talk about an economic union when bilateral relations are strained and we are still having difficulties implementing specific items of cooperation.

Mr Speaker, Sir, Singapore and Malaysia share a symbiotic relationship. I fully subscribe to Dr Mahathir's philosophy of "prosper-thy-neighbour". It is an important way to strengthen our two countries' symbiotic relationship and help each other to become developed. The electric train, when it comes about, will be more than a physical connection; it will be a powerful symbol of the two countries' inter-connectedness on the fast track to success.

I have another reason for telling the House the details of my discussion with Dr Mahathir on the POA and the electric train. Whatever the present strains in our relationship, I support Dr Mahathir's vision of a fast train network connecting Singapore to Kuala Lumpur, and all the way to Kunming. I hope that the fast train service will succeed. But I need Malaysia's help to vary the terms of the POA so that the fast train can operate in Singapore. I have suggested how this can be done through a new framework of wider cooperation.

I do not know at this stage when the new era of cooperation will come, or whether it will come. I hope it will come. I shall work for it. If it materialises, I will have to come to Parliament to vary the terms of the POA, and seek your approval for the new electric railway line. I will also ask the House to support our investing in the Singapore sector of the infrastructure for the fast train service.

Singapore 21 - A Vision for a New Era

Mr Speaker, Sir, now let me turn to Singapore 21 - our Vision for a new era.

In January 1992, during the debate on the President's Address, I asked the House,

"To judge my Government not by what I say or can accomplish straight-away, but by what my Government will achieve at the end of its term of office. Edusave, independent schools, Medifund, home improvements - they need four to five years to show everyone what there is in it for them. If we go for short term, small benefits, and miss the long term, big benefits, we will lose our strategic way. This will spell ruin for Singapore."

We went the full term. We delivered on our promises. The people gave their verdict. They liked our programme. That was the main reason for our success in the General Election, not the corny excuses given by Mr Jeyaretnam for his defeat.

Today, I am again asking this House to take a long view, to look soberly into the future, weigh the strategic choices and make the right strategic decision. This House will lead Singapore into the next millennium. It has been self-renewed. It should be a future-oriented House, one with ideas, one which will deliver.

We know one thing about the future.

Globalisation will mean more intense competition. Many MPs have emphasised the need to sharpen our competitiveness to stay ahead. The Information Technology revolution will speed up the process of change itself. We must keep on learning and be quick to adapt to changes.

But there are many things in the future we do not know, and cannot possibly foresee. Twenty years ago, as a young MP, I had no idea that Information Technology would so change the way we live, or that Communism would collapse in the Soviet Union and Eastern Europe so abruptly and benignly. Given that changes will be even more rapid and drastic in the future, what kind of a world will we live in in 20 years' time?

How do we prepare Singaporeans for this unknown future?

First, we need to understand, as far as we can, the nature of the game unfolding. Second, Singaporeans must have a goal to chase and a vision to carry this country forward.

Challenges

Let me talk first about the basic challenges facing every country, developed and developing, and then the challenges facing Singapore in particular.

All countries face a dual challenge. First is the economic challenge to maintain growth, create good jobs and attract investments. All countries have to cope with an increasingly integrated and competitive world. To do well, their societies must motivate and reward risk-takers and entrepreneurs, the highly skilled and the more able.

Second is the social challenge to maintain social cohesion and to manage growing income differences between the highly educated and skilled and those who are less skilled and less able. The fast pace of technological change, coupled with the mobility of investments across international borders will mean constant change in a country's socio-economic structure. Industries will boom or bust. Companies will migrate or down-size. This will cause insecurity and social turbulence. Governments will come under pressure. Thus France has lurched from Left to Right and Right to Left, all within five years.

All countries will have to balance these two imperatives: economic competitiveness and social cohesion. Many developed countries are finding this balancing act very difficult. While the OECD countries are leaders in the knowledge-intensive industries, many are also experiencing uneven or declining education standards, high unemployment and social tension, especially in Europe. Growing juvenile crime, racial tensions, structural unemployment, job insecurity, an unsustainable state welfare burden, and loss of confidence in the future are straining their social fabric.

The experience of the developed countries holds lessons for us. They suggest the kinds of problems we may face in the future. Social divisions are not a major problem for Singapore today. But divisions may grow as our society matures and income gaps widen. We need to nip these issues in the bud.

The most pressing challenge facing Singapore today is to retain our competitive edge. Keen regional competitors are breathing down our neck. Our neighbours are aggressively upgrading their infrastructure. They are directly competing with our traditional economic strongholds, our port and airport. They are also seeking niches in the new knowledge-based industries, like Information Technology.

Our neighbours have the advantages of cheaper land and abundant labour, and the pull of larger domestic markets. They can copy successful strategies and acquire the latest technologies. But we still have the competitive edge of a better trained and disciplined workforce, higher productivity, and a more conducive total business environment.

We can meet the regional competition. But merely outperforming our neighbours is not good enough, nor is it our goal.

Winning the Malaysia Cup or even the South-East Asian Games championship may make us the best in the region, but we are still nobody in the world. Increasingly, Singapore will have to compete with both developed and developing countries for talent and investment. We are not only competing with Kuala Lumpur, Bangkok, Hong Kong, Shanghai or Taiwan but also Seattle, Atlanta, Dublin and Sydney for investments. Unless we can develop into a world-class city, with capabilities equal to the best anywhere, we are just a tiny speck on the world map. We have to make it to the World Cup finals.

Besides economic competition, Singapore faces a far more fundamental challenge: rooting our best and brightest in this country. A recent survey by MasterCard found that one in five Singaporeans wishes to emigrate, despite Singapore's economic success. I am not sure how much to believe this survey. The Good Conduct Certificates issued to those who had emigrated, the data did not suggest that there is a serious uptrend, nor is there a downtrend, in emigration. In 1987, 3,825 Good Conduct Certificates (GCCs) were issued; 1990, went down to 2,528; 1996, 2,240. But, nevertheless, there is enough anecdotal evidence to suggest a potential problem. Choo Wee Khiang tells me that a friend of his was dismayed and shocked that his 15-year old daughter had talked to him about emigrating. So our key challenge is to build ties among the people and emotional bonds to this country. Deepening our sense of belonging will be a priority in this term of my Government.

Response

How should we respond?

We can continue as we are, pursuing our current strategies, perhaps with some minor course corrections, hoping that National Education will grow a stronger sense of national identity. If we do this, it is quite likely that we will enjoy several more good years.

But what if we should suffer an external shock and run into economic difficulties? Who would have anticipated the current strain in relations with Malaysia, a year or even six months ago? What will hold Singaporeans here? Affluence and prosperity cannot be the only glue holding us together. If Singaporeans are just economic animals, materialistic with no sense of belonging, they will be like migratory birds, seeking their fortunes in other lands when the season changes. They will have no cause to fight for, no community to live for, no country to defend or die for, only the pragmatic desire to get on and get rich. If it ever comes to this, Singapore will not survive as a sovereign nation.

To meet this problem, and other challenges now unknown, it will not do just to make minor course corrections, small improvements to a generally working model. We need a new vision for Singapore, an ideal, a fresh mindset. We need to move beyond material progress, to a society which places people at its very centre. Singapore 21 is my team's vision for the future of Singapore, a Singapore where people make the difference, where each citizen is valued, a Singapore which is Our Best Home, an ideal home which we will all help to build.

Singapore 21 is about what the people of Singapore want to make of this country. More than a house, Singapore must be a home. The Government can provide the conditions for security and economic growth. But in the end, it is people who give feeling, a human touch, a sense of pride and achievement, the warmth. So beyond developing physical infrastructure and hardware, we need to develop our social infrastructure and software. In Sony Corporation, they call this "heartware". We need to go beyond economic and material needs, and reorient society to meet the intellectual, emotional, spiritual, cultural and social needs of our people.

Our concept of competitiveness must therefore recognise that the robust and successful societies of the future will be those which place people at the centre. Countries and societies which can develop and mobilise the people, and serve the human needs, goals and aspirations of their citizens will have a lasting edge. Singapore must be such a society.

Towards Singapore 21

There are several elements that I believe we need to adopt to achieve this.

Beyond Top Talent - Value and Develop People at all Levels

In a global, knowledge-based economy, countries which attract and mobilise human talent will thrive. We have to continue to draw in talent, but we must also continue to invest heavily in the education and training of our own people. We aim to maximise the talents and abilities of all Singaporeans, not just the best and the brightest, but every individual.

Not everyone is equally talented. But every person has some useful ability. Our education system must therefore not only groom our top talent, but also recognise and develop a range of skills and abilities at every level. We have begun to move in this direction.

Not everyone can perform equally well. But every person who tries his best should have his contribution recognised. Our attitude should not be that only a few people at the top add value, while the rest only run the machinery. Every Singaporean has a contribution to make to his job, his company, his community and his country. But equally, he has a responsibility to keep himself employable and productive through continuous learning, and to play his part to the best of his ability.

This does not mean moving away from meritocracy. We must always give the ablest and most committed the scope and the support to develop to their full potential so that they can contribute their maximum to society. But we must also develop all Singaporeans to their full potential. Countries with a larger population can afford to use their human resources less efficiently. But Singapore's talent pool is so small that we cannot afford any human wastage. Our system must not focus primarily on developing our top talent, but must value and develop people at all levels.

Beyond the Drive to Succeed - Passion for What We Do

Singapore was built by hardworking people who had the drive and determination to succeed. We must not let this work ethic weaken. But beyond the drive to get ahead, we must cultivate a sense of pride in our work and a passion for what we do. Many Americans have this quality. They have an intense interest and passion for whatever field they are in, which drives them to develop true expertise and to push the frontiers of their field. This quality has made them world leaders in many new technologies and disciplines. This is what R&D and innovation are about - people who pursue their interests and ideas with a passion, people prepared to be different from others - because they are thinking of new things. We must foster this sense of passion, this pride in work, both in the schools and in the workplace. So beyond the drive to succeed, we must have passion for what we do.

Beyond Success - A Sense of Service

The Government has shared the fruits of growth with all Singaporeans, and will continue to do so. But beyond our efforts to improve the lives of all Singaporeans, my hope is that Singapore will become a society where every citizen not only strives to get ahead, but also feels a responsibility to share success. Many of our founding fathers, like Tan Tock Seng, Lee Kong Chian, Govindasamy Pillai (a founder member of the Ramakrishna Mission), and Haji Ambo Sooloh (a Bugis merchant and philanthropist), used their wealth to benefit others, not to flaunt their success or for personal glory, but out of a deep sense of responsibility to their community. They built schools and hospitals, and helped the needy and the weak.

We must keep this noble tradition alive. Beyond donating to charity, every Singaporean, no matter what his station in life, can do something to help others and his community, whether through voluntary welfare organisations, or simply by getting involved in community work in his neighbourhood.

Not all well-off Singaporeans contribute to charities. Some feel that by paying taxes, they are already subsidising the poor and needy. But paying tax is the legal obligation of every citizen. It is not philanthropy. It offers nothing extra for the community. We need to change the mindset of such people, to get them to feel that they owe a social responsibility to others for their success and affluence.

Beyond Tolerance - Respect and Gain Strength from Diversity

In many societies, race, language or religion will take on increasing importance either as a rallying cry or as an anchor in an uncertain and fast changing world. Look at the divisions Pauline Hanson has generated in Australia. But Singapore is a multi-cultural, multi-religious society. So we must distinguish ourselves as a society where the different races respect and accept one another, and the majority makes room for the minority to succeed. Everyone, Singaporeans and visitors alike, regardless of their cultural or religious background, should feel comfortable in Singapore.

But while recognising and celebrating the importance of each community's heritage, our shared national identity must come before our cultures of origin. As our pledge reminds us, first and foremost, we must be Singaporeans, one united people regardless of race, language or religion. And we must guard against individuals or institutions which would stir up religious or racial divisions in society.

As a society, we must be willing to respect and accept a greater diversity of ideas. Why do some societies, like the US, for example, produce more ideas and innovation than others? Education systems have something to do with it. But the broader social environment is critical in supporting creativity and innovation, whether in the arts, sciences, research, industry or politics.

We have to move beyond tolerance, to respect the different cultures in our midst, and to gain strengths from diverse ideas. But there must be individual responsibility and a sense of accountability to the broader community. Rights and duties are inseparable, two sides of the same coin. This is the way to become a cosmopolitan, creative and cultivated society, which attracts top talent from all over the world.

Beyond Leadership - Civil Participation

Outstanding leadership and sound government will always be crucial. The government has to provide the best conditions for security and economic growth. Yet leadership and government will not be enough. We need a civil society to mobilise our people's energies and talents, and to create a cohesive and resilient nation. When people participate actively and become involved in community and national issues, they build ties among themselves and bond to the country.

We must change the mindset that only a few leaders at the top of the system need to think and take responsibility for social and national issues, while the rest of society can simply mind their own business and go about their daily lives. All Singaporeans must feel a responsibility for solving local issues and shaping their own communities. They should not wait for the Government to solve every problem. The Government itself must be prepared to take a step back and perhaps even a back seat, especially on local community issues, and allow some free play to develop.

One good way to do this is for concerned citizens to get involved in voluntary work or in the running of their own local communities, through the Town Councils, CDCs or RCs. Singapore's political life must evolve in the direction of greater participation by the people, more willingness to shoulder responsibilities, and more giving to the country than taking.

Conclusion

In future, the competitive advantage of nations will lie in their people - how a society is organised to maximise and mobilise the potential of its people, and how it serves the material, spiritual, intellectual, political, social and emotional needs of its citizenry. The ideas I have put forward are to develop a cohesive and resilient nation, a people fully equipped to compete in the future and a people with emotional stakes in Singapore.

Singapore 21 will help us to pre-empt the problems faced by many developed countries today as they try and maintain economic dynamism while managing growing social divisions. We should focus on building capabilities, resilience, and "heartware" for the future, rather than just going for growth and trying to reach developed country status.

To work through these ideas will require fundamental changes in our approach. We need time to build a consensus about the need for such a change of course, and to work out what exactly the new course should be. We are already taking major initiatives in education. The public sector is actively thinking of the future and also for the future, preparing for scenarios which we hope to avoid but which we must be ready to cope with.

But this is only half the story. The other half depends on Singaporeans feeling a responsibility to contribute their ideas, and committing themselves to participate actively in their communities and in national life to make our vision of a best home a reality.

Singapore is about people. It is only in Singapore that we, as Singaporeans, have the freedom to build the kind of environment we want to live in, work and bring up our children. That is what being an independent, sovereign nation means. In no other country will we have the same opportunity to shape a country we can be proud of. I hope that Singaporeans from all walks of life will rise to the challenge and make the difference for Singapore and for your children.

Singapore 21 is about a Home for a People, not a hotel. A Home where we feel comfortable with ourselves, where we look after one another, where everyone makes the country succeed. Our vision for Singapore is not houses of bricks and mortar, but homes with hearts and dreams. People who feel confident and secure. People who believe in Singapore and its future. Let us work together to make Ours the Best Home, for ourselves and our children. [Applause].

Mr Jeyaretnam: Mr Speaker, Sir, may I ask the Hon. Prime Minister, by way of clarification, a question? I was very moved by his statements that he had tried and it is his hope to bring about a closer relationship with Malaysia, and he called it a symbiotic relationship, and that he was prepared to go the extra mile if necessary. May I ask him, in the light of all that, did he consider how that statement in the affidavit would have been received by Malaysia when they came to know of it? He must have seen that statement before it was filed or after it was filed in court. I cannot believe that the Prime Minister was not aware of it, and so were the other plaintiffs. Did the Prime Minister give any thought to whether that statement in that affidavit would damage the relations with Malaysia? It is not enough, Mr Prime Minister, as SM Lee would have us believe, to say that that affidavit was meant only for the court and it was only to be in chambers. The Prime Minister's lawyers would have advised him that once an affidavit is read in court, whether in chambers or in open court, it can then be released to the public, and so there was a danger that Malaysia would come to know of that statement. May I ask the Prime Minister whether he had given any thought to that?

Mr Goh Chok Tong: Mr Speaker, Sir, I want to end this debate on the President's Address on a high note, not in some scruffy debate on this issue which has been in the press for a long time.

Some hon. Members: Hear, hear!

Dr Wang Kai Yuen (Bukit Timah): Mr Speaker, Sir, it is now my humble duty to wrap up the debate. However, after the Prime Minister's speech, I find it not an easy task to do, and therefore I intend to be very brief.

In the course of the past four days, over 50 speakers have taken the floor, and all except two have supported the motion. I would like to thank the Members for supporting the motion standing in my name. All 23 new Members have delivered their maiden speeches. Even though they are new in this House, several of the deliveries were robust and invigorating. All have prepared themselves well. Their speeches give us an idea of the calibre of the Members and what concerns them most. And those retired Members who had made way for the new Members shall be happy to know that their replacements are worthy ones.

Sir, most of the speeches made reference to the President's Address and the topics covered can be classified into several areas. Topic number one is international competitiveness of Singapore. This topic received many comments reflecting the concern of Singaporeans. The issue is how to continue to develop our economy in the face of increasing international competitions, and the increasing cost of doing business in Singapore. Many Members recognise that the key lies in the preparation of our young for future competition, and the need to move up the technology curve in order to remain competitive is also well recognised.

Topic number two is the play of free market forces versus social cohesion. All Members who spoke on this topic stressed the importance of free market economy in Singapore's continued success. They believe in meritocracy to promote social mobility and to reward hard work. On the other hand, Members also recognise that there will always be someone in our midst who will fall behind.

Topic number three is education and life-long learning. Many Members highlighted the fact that the future depends on the education of our young to meet competition. They note that our young must be taught creativity. Our young must acquire the desire for life-long learning. Members also stressed the importance of continuing education and upgrading for the adult working population.

Topic number four is on Singapore's value system. The value system of Singapore is another much discussed topic. Members are concerned that the Singapore society today might be turning too materialistic, and there might be concern that Singaporeans are exhibiting increasing signs of evolving into a self-centred society. Other Members were also concerned that our current success might breed complacency.

Topic number five is on Singapore/Malaysia relationship. This is certainly the most emotive issue during the current debate. Many Members deplore the current state of affairs between our two countries. All in their speeches reflect the quiet resolve of Singaporeans to stand up for Singapore. In this respect, Members also reflected Singaporeans' impatience over the perennial threat to cut our water supply. As Mr Chiam said, water is our life blood. He also mentioned that cutting water supply is a very serious matter. It is tantamount to a cause for war.

The Prime Minister and the Minister for Foreign Affairs have also comprehensively discussed about the Points of Agreement between Singapore and Malaysia over the KTM lands. Singapore MPs have been quiet over the past two months over this issue, and this debate allows Members to air their views. They have done so in a quiet and resolute way and have expressed unequivocally the true feelings of Singaporeans. The issue now is how do we proceed from here, and I believe that the ball is now in the Malaysian side of the court.

Topic number six is on the National Education programme. The National Education programme was proposed last year when it was recognised that young Singaporeans lack a good understanding of our history. In view of the recent events, the importance of the National Education programme has become obvious, and it is a hot topic in this debate. All the Members who spoke agreed that this programme is important to ensure that young Singaporeans will remain a united people as they grow up in future.

Mr Speaker, Sir, I am sure Members who have spoken have expended much time and effort into preparing their speeches. I would like to thank Members for their contributions. You, Sir, too deserve our thanks for showing forbearance in sitting through these four days of speech making. Being an eloquent speech maker yourself, I am sure you must have been tempted from time to time to join in the debate.

From the speeches, Sir, we can see that the atmosphere of this House is an upbeat one. It is one of hope, it is one of optimism. We do have challenges ahead of us, but none that we cannot overcome. This reflects the confidence of Singaporeans as we face the challenges of the new century. Ours is a country that is secure, united, progressive and prosperous as we enter into the 21st century. And under the banner of Singapore 21, we Singaporeans will achieve our goal of making Singapore Our Best Home.

On this note, I would like to ask Members to join me in thanking the President for his Address to this House. [Applause].

Question put, and agreed to.

Resolved,

That the following Address in reply to the Speech of the President be agreed to:-

"We, the Parliament of the Republic of Singapore, express our thanks to the President for the Speech which he delivered on behalf of the Government at the Opening of the First Session of this Parliament."