27 January 2002

Singapore still awaiting Malaysia's reply on bilateral issues package: MFA

By Hwee Goh

Singapore's Foreign Affairs Ministry has responded to media queries on its negotiations with Malaysia over outstanding bilateral issues, saying Singapore had written to Malaysia in December and is still waiting for a reply. About a week ago, Malaysian Prime Minister Mahathir Mohamad said he hoped Malaysia and Singapore could reach an agreement soon on the issue of water. Dr Mahathir said not much progress had been made, and implied that Malaysia was losing money the longer the agreement was delayed. A Singapore Foreign Ministry spokesman said Singapore has written several times to Malaysia to settle the issues of the package. Both sides have stated the price they expect for water. On December 10, Singapore sought clarification on a number of issues. Malaysia had indicated that it might want to end its rail service in Johor, instead of in Singapore, so Singapore asked where its rail station would be, Singapore also sought details on the additional KTM land that Malaysia wants to include in the package, if it ends its service in Johor. Singapore asked Malaysia to set out its position on these and other issues, so that there would be a clear framework for both sides, led by the two Foreign Ministers, to meet on the details. An answer from the Malaysians has not been forthcoming. Singapore has been paying three sen per thousand gallons of water under the two current water agreements. It has said that it would increase that 15-fold to 45-sen, in return for long-term water supply in the new package, although it was not obligated to raise the price. This was one of many issues discussed last September by Senior Minister Lee Kuan Yew and Dr Mahathir, who announced a skeletal framework to settle issues, including water, as a package. However recently, in the wake of Dr Mahathir's comments, there have been views expressed across the Causeway, that Singapore is profiteering by buying water cheap and selling it at a higher price. The MFA spokesman said Singapore buys water from Johor at three sen per thousand gallons. It costs Singapore RM2.40 to treat that water. But Singapore absorbs most of that cost, and sells the treated water to Johor for 50 sen. In turn, Johor sells that water to its consumers for RM3.95. The two water agreements were in fact subject to review 25 years from the date they were signed -- in 1986 and 1987. However, Johor chose not to review the price of water sold to Singapore. Instead it currently purchases 37 million gallons per day of treated water from Singapore, well above the 17 mgd Singapore is obliged to sell under the agreements. Finally, to the allegation that these agreements were drawn by the British in favour of Singapore, the MFA said, "This is without basis in fact." The 1961 and 1962 agreements were signed when Malaya was already a sovereign nation and when Singapore had achieved self-government.