PRIME Minister Lee Hsien Loong will receive a very important visitor from Malaysia at his office, the Istana, tomorrow.
And he knows he won’t have it easy.
This is unlike any other VIP that he has hosted. Lee is welcoming Tun Dr Mahathir Mohamad who will be making an official visit to Singapore.
It is no secret that under Dr Mahathir, strained ties between Malaysia and Singapore were legendary when he was in power between 1981 and 2003.
One issue that contributed to the bilateral ties being prickly was raw water being sold to Singapore.
The issue “almost” died down after Dr Mahathir left office with his predecessors Tun Abdullah Ahmad Badawi and Datuk Seri Najib Tun Razak switching gears on bilateral relations by setting a friendlier tone.
After Dr Mahathir became Prime Minister again in May, Lee quickly made a trip to Putrajaya and declared that he was looking forward to working with Dr Mahathir’s Pakatan Harapan government for the mutual benefit of their peoples.
So much has passed under the bridge since that May meeting.
In June, Dr Mahathir declared Malaysia will renegotiate the water supply agreement with Singapore, telling Bloomberg in an interview that the price of water sold is ridiculous and it will be among issues with Singapore that Malaysia needed to settle.
Malaysia has always felt that the 1962 water agreement was lopsided. Another agreement signed in 1961 had already lapsed in 2011.
The 1962 deal, which expires in 2061, gives Singapore 250 million gallons of raw water daily at three sen per 1,000 gallons. Malaysia buys back a portion of that, treated, at 50 sen per 1,000 gallons.
Singapore always maintained that Malaysia has lost its right to review the price of raw water sold under the 1962 agreement in 1987.
However, Malaysian officials insist Singapore has always argued on legalistic interpretations when dealing with their neighbour across the Causeway.
“Singapore takes strict interpretation on this that on the 25th year, the price of water must be reviewed and since Malaysia did not ask for the review that year, we have lost our right.
“Our contention is the agreement doesn’t stipulate the exact time or year for a revision. It can mean after five years or 20 years. That is purely legal interpretation.”
An official said he would not be surprised if Singapore would go to a third party or arbitration to resolve this as it had done in the past.
He cited an example of how Singapore claimed development charges on three parcels of former KTM Bhd land on the island which was supposed to be developed by a Malaysia-Singapore joint venture company, M+S Pte Ltd.
The three parcels, under the Point of Agreement land in Tanjung Pagar, Kranji, and Woodlands, were supposed to be developed with the agreement of Singapore and Malaysian leaders in 2010.
The matter could not be resolved and it was referred to an international arbitral tribunal which then decided the M+S Pte Ltd didn’t have to pay the development charges.
“Singapore decided to impose the development charges when we had agreed to develop the parcels of land. They took us for arbitration, we took them on and we won.
“Nobody learnt any lessons from dealing with Singapore except for Dr Mahathir,” said an official.
Another possible issue that may be raised is Malaysia’s decision to discontinue the proceeding it has applied to revise the International Court of Justice’s ruling that gave Pulau Batu Puteh (Pedra Branca) to Singapore in 2008.
When the ruling was made, the two governments set up a sub-committee to draw up maritime boundaries around the disputed areas of Pedra Branca, Middle Rocks and South Ledge in 2013.
Several rounds of meetings were held but reached an impasse after Malaysia decided to challenge the ICJ’s ruling.
In the 2008 ruling, ICJ had awarded Middle Rocks to Malaysia and South Ledge belonged to the state in whose territorial waters it is located.
It will be an interesting meeting taking place at the Istana tomorrow.
Lee in a Facebook posting in August, after talk of a water price review emerged, insisted on the need to work together to tackle common challenges.
“And when our interests diverge, we must find constructive ways to resolve our differences.”
The point is nobody knows what Dr Mahathir has in mind when he sits down with Lee.