MFA Spokesman's Comments

Continuing, the MFA Spokesman added:

"Singapore has shown flexibility in wanting to resolve the revision of price of existing water. We are prepared to discuss this issue even though we have informed the Malaysian side on many occasions that Malaysia has lost its right of review.

At the senior officials' meeting from 16-17 October 2002, if the Malaysians want to discuss only water, we will listen to what they have to say. But this does not change our position that Malaysia has no legal right to a review. Furthermore, as you know, the water issue has two aspects:

*The price of current raw and treated water under existing agreements; and

*The price of future water after 2061 upon the expiry of the 1962 Water Agreement (we have already told the Malaysian that with NEWater, we are prepared to let the 1961 Agreement lapse).

Both aspects of the water issue must be discussed during the 16-17 October talks. Otherwise, there is no basis to proceed."

Elaborating, the MFA Spokesman said:

"The 1961 and 1962 Water Agreements do contain clauses providing for a price review after 25 years. But Malaysia did not invoke these clauses when they became due, and we have been advised that Malaysia has lost the legal right to do so.

We have already told this to the Malaysians. We will tell this to them again at the upcoming 16-17 October talks. It is incumbent on Malaysia to prove that they still have a legal right to a price review. If they insist, we will contest their right."

Asked to comment on the Malaysian claim that the price review of water supplied under the current agreements should be retroactive, the MFA Spokesman said: "How can it be retroactive when the existing Agreements do not provide for it?"

. . . . .

MINISTRY OF FOREIGN AFFAIRS
15 OCTOBER 2002