POINTS OF AGREEMENT BETWEEN THE GOVERNMENTS OF SINGAPORE AND MALAYSIA (Status)

Column No : 3116

POINTS OF AGREEMENT BETWEEN THE GOVERNMENTS OF SINGAPORE AND MALAYSIA:

(Status): 2.

Dr Ong Chit Chung asked the Minister for Foreign Affairs what is the status of the Points of Agreement (POA), which was concluded between the Governments of Singapore and Malaysia in 1990, now that the package negotiations have been discontinued by Malaysia.

The Minister for Foreign Affairs (Prof. S Jayakumar): Mr Speaker, Sir, Prime Minister Goh and myself have informed the House on 5th June 1997 as well as on several subsequent occasions on the full background and details concerning the Points of Agreement (POA) concluded between Malaysia and Singapore on 27th November 1990.

If I may recapitulate briefly, the POA is a government-to-government agreement between Malaysia and Singapore concerning railway lands in Singapore. It was signed on 27th November 1990 between then Prime Minister Lee Kuan Yew on behalf of Singapore and then Minister of Finance Tun Daim Zainuddin on behalf of Malaysia. Under the POA, the KTM railway station would be vacated and moved from Tanjong Pagar to Bukit Timah in the first instance. The land at Tanjong Pagar would be vested in a limited company for joint development (60% for Malaysia and 40% for Singapore). All railway lands south of Bukit Timah other than Tanjong Pagar would revert to Singapore. When the MRT station reached Woodlands New Town, which took place on 10th February 1996, KTM may, within five years, move its station from Bukit Timah to a site in Woodlands adjacent or close to the Woodlands MRT station. In that event, two additional pieces of land in Kranji and Woodlands would be vested in the limited company, also for joint development. All other railway lands south of Woodlands, other than the Tanjong Pagar, Woodlands and Kranji sites, would revert to Singapore. The POA was explicit that there will be no other compensation for Malaysian railway land outside of the three big pieces at Tanjong Pagar, Kranji and Woodlands.

As Members know, Malaysia has not implemented this relocation of the railway station from Tanjong Pagar as stipulated under the POA. We have tried to work with Malaysia to implement the POA. However, after signing this government-to-government Agreement, the Malaysians wanted variations of the POA to include additional parcels of land. We were prepared to consider their proposals as part of the package of issues.

However, now that Malaysia has discontinued the package approach, the basis to consider Malaysia's request for variations of the terms of the POA no longer exists.

Sir, Malaysia also took the position that the POA becomes operative only when Malaysia decides to move its station from Tanjong Pagar. In an exchange of letters in 1997 between myself and then Malaysian Foreign Minister Abdullah Badawi, Singapore clearly spelt out our position on the law, which was that the POA became operative on the day it was signed, ie, 27th November 1990. Moreover, we pointed out that Malaysia had in fact taken steps to implement the POA. However, Malaysia reiterated its stand and its interpretation that the POA would become operative only when Malaysia decided to move the KTM railway station from Tanjong Pagar.

Therefore, Sir, the dispute centres on the legal interpretation of when the POA becomes operative. The Singapore Government's position is that this issue can easily and amicably be resolved by international adjudication at the International Court of Justice (ICJ) or through international arbitration at the Permanent Court of Arbitration (PCA). We have sent a Third Person Note to Malaysia on 26th September 2003 proposing that we adopt this approach on the POA issue. We are awaiting Malaysia's reply.

Members are aware that several outstanding bilateral issues like Pedra Branca and reclamation have already been referred to the process of international arbitration or to the ICJ. On the water issue, Prime Minister Mahathir himself has publicly advocated the arbitration approach. In August 2002, Malaysia also took initial steps towards arbitration by serving formal notice to review the price of raw water. Singapore reserved our position on Malaysia's right to review. But we have stated that the dispute should be resolved through arbitration in accordance with the provisions in the Water Agreements.

Sir, our proposal for resolving this matter is also consistent with what Malaysia has stated publicly. The Prime Minister of Malaysia was reported in the New Straits Times on 8th September 2003 to have said:

"...if we can no longer negotiate, then we should have arbitration. That should be the way. If we want to settle the matter, then we need a third party."

He repeated this stance in his 2004 Budget Speech on 12th September 2003, and I quote:

"When two parties are unable to resolve a dispute through negotiations, then there is a need for a third party to arbitrate. We are willing to seek arbitration."

Sir, we share this view that where negotiations fail to resolve an outstanding issue, we should refer it to a third party adjudication or arbitration, especially where it turns on a legal issue.

Hence, our proposal that this approach be adopted for the POA issue as well. Rather than allow it to trouble the relationship, it would be in the interests of both Malaysia and Singapore to seek an amicable resolution of the issue through international arbitration or adjudication. It would also be consistent with our approach on certain other bilateral disputes. More importantly, it would allow both countries to move ahead in bilateral issues and focus on our many areas of mutual cooperation and interest.