COMMENTS BY MFA SPOKESMAN

COMMENTS BY MFA SPOKESMAN

In response to media queries:

Malaysia has said that Singapore is delaying negotiations thus causing Malaysia to lose money everyday.

"Singapore has been waiting for Malaysia to clarify certain key points and clearly set out its position in order that there will be a framework for officials to resume negotiations to settle details."

"The facts speak for themselves." (See attached chronology.)

Malaysia has claimed that Singapore has refused to pay a reasonable price for water.

"This is not true."

"On 21 February 2001, Malaysia had offered 60 sen per thousand gallons, reviewed every five years, for raw water. Malaysia stated that this was what Johor believed was a "fair price".

"Singapore agreed to 60 sen, adjusted for inflation every five years, as the price for raw water beyond the existing agreements. As part of an overall package, we even offered, although we are not legally obliged to do so, to pay 45 sen per thousand gallons for water we receive under the current agreements."

"These new prices cannot be seen in isolation. They must be seen in the context of an overall package being negotiated. The package includes, among other things, payments that Malaysia will receive for railway land in Singapore. The total amount of money that Malaysia will receive when other items in the package are factored in will be over 1.5 billion ringgit".

Is it true that Singapore has been underpaying Johor for raw water because Hong Kong buys water from China at RM8 per 1,000 gallons.

"This is a misleading comparison."

"The price of RM8 per 1,000 gallons paid by Hong Kong to Mainland China for raw water takes into account China carrying the infrastructural, operational and maintenance costs. Malaysia does not bear any such costs in supplying water to Singapore. All these years, Singapore has absorbed all costs of building the infrastructure in Johor for water supply such as dams, pipelines, plants and equipment. We also bear the operational costs."

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MINISTRY OF FOREIGN AFFAIRS
2 FEBRUARY 2002

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Annex

- In 1998, Prime Minister Goh Chok Tong visited Malaysia three times to discuss bilateral issues, which include the price and long-term supply of water.

- In 1999, officials met three times; the third occasion in Singapore in May.

- In August 2000, Senior Minister Lee Kuan Yew visited KL to try to narrow the differences over the outstanding issues in the package.

- On 24 August 2000, following Senior Minister's discussions with Dr Mahathir in KL, Singapore wrote to Malaysia formally setting out our proposals.

- On 21 February 2001, six months later, Malaysia replied.

- On 23 April 2001, Singapore sent another letter to Malaysia.

- In September 2001, Senior Minister Lee visited KL.

- On 8 and 21 September 2001, Singapore followed up with two other letters, setting out Singapore's proposals.

- On 18 October 2001, Malaysia replied, raising several issues. A new one was that it might end its rail station in Johor.

- On 10 December 2001, Singapore replied to seek clarification and to request Malaysia to clearly set out its position so that there would be a framework for the officials to settle details. Singapore has been awaiting a reply to this letter.

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