Singapore-KL water pacts 'more than commercial contracts'

The Straits Times, May 28, 2007



KUALA LUMPUR - SINGAPORE'S Ministry of Foreign Affairs (MFA) has pointed out that the water agreements between Singapore and Malaysia are not 'commercial contracts' but international binding agreements.

It did so in a letter to the New Straits Times published last Friday in response to a commentary which appeared in the paper last Monday. The author of the commentary, former ambassador Deva M. Ridzam, had described the price of water under the 1961 and 1962 agreements as a 'straightforward case of what is a fair price between a 'willing seller and a willing buyer''.

MFA said Datuk Ridzam was 'mistaken' in saying that, and his assertions on the issue were 'fundamentally inaccurate'. It said he had wrongly stated that the 1961 and 1962 agreements between the Johor government and the Singapore City Council are commercial contracts between Singapore and Malaysia.

MFA added: 'On the contrary, the water agreements are not ordinary or 'commercial' agreements. These are binding international agreements duly confirmed and guaranteed by both the Malaysian and Singapore governments in the Separation Agreement that established Singapore as a sovereign state in 1965, and registered at the United Nations.

'Both countries are, therefore, bound by international treaty obligations to honour observance of the water agreements and neither side can unilaterally vary their terms and conditions.'

Johor is bound to sell water to Singapore at a specified price, the MFA said. It added that the agreements provide a mechanism for the price to be reviewed, and for disputes to be resolved through arbitration.

MFA said: 'Singapore has made clear its willingness to resolve through arbitration in accordance with these provisions of the Water Agreements the question of whether there is still a right of review and if so, what should be the revised water price.'

But NST omitted this statement made by the Singapore High Commission's press secretary, Mr Shivakumar Nair, when it published his letter in its Friday edition. That prompted a second letter from Mr Nair to NST pointing out the omission of a 'significant phrase'.

He said the omitted phrase makes clear Singapore's position: that Malaysia has lost its right to review the price of water, but that the question of whether there is still a right of review as well as the quantum of the price revision can both be resolved through the legal process as provided for in the two Water Agreements.

Therefore, MFA pointed out, it is not simply a matter of price; rather, it is how the agreement on the new price is reached.