Malaysia–Singapore Points of Agreement of 1990

Malaysia–Singapore Points of Agreement of 1990 (POA) is an agreement between the Southeast Asian countries of Malaysia and Singapore over the issue of the future of railway land owned by the Malaysian government through Malayan Railways (Keretapi Tanah Melayu or KTM) in Singapore. It was signed by the then Prime Minister of Singapore Lee Kuan Yew and the then Finance Minister of Malaysia Tun Daim Zanuddin on behalf of their respective countries on 27 November 1990.

The implementation of the agreement was deadlocked for many years because of disputes over its interpretation. However, on 24 May 2010, Malaysian prime minister Najib Razak and his Singaporean counterpart Lee Hsien Loong, after a leaders' retreat in Singapore, announced that the two sides had reached an agreement on outstanding issues concerning the 1990 POA, thus breaking the 20-year-old deadlock.

The agreement

Under the agreement, KTM would vacate its station at Tanjong Pagar and move to Bukit Timah while all KTM's land between Bukit Timah and Tanjong Pagar would revert to Singapore. Railway land at Tanjong Pagar would be handed over to a private limited company for joint development of which its equity would be split 60% to Malaysia and 40% to Singapore.

The agreement however became one of the major reasons for the less-than-warm relationship between Malaysia and Singapore. The key contention was the difference in interpretation of the agreement by the two countries, resulting in its implementation being deadlocked for many years.

Singapore insisted that the agreement came into effect immediately after it was signed by both parties. Singapore stated that once Woodlands was connected to its mass rail transit system, KTM would have to move out from Tanjong Pagar to Bukit Timah within five years. Malaysia on the other hand took the position that the agreement would only be effective when Malaysia moved its station from Tanjong Pagar.

The dispute

Malayan Railway land in Singapore

Malayan Railway land, covering over 217 hectares and stretching 20–30 kilometres into Singapore territory, was acquired through a lease under a 1918 colonial ordinance specifically for use by Federated Malay States Railways (FMSR, which later became KTM) for a period of 999 years. That same ordinance limits the use of the land to railway operations, thus preventing the land from being developed despite being situated on prime land.

Under a bilateral arrangement on 27 November 1990 known as the Points of Agreement (POA), Malaysia and Singapore decided to depart from the 1918 Railway Ordinance to facilitate joint redevelopment of the Tanjong Pagar Railway Station and the lands adjacent to the railway line.

Under the ordinance, Malaysia was allowed to operate a customs, immigration and quarantine checkpoint at Tanjong Pagar railway station, together with the Singapore CIQ to facilitate convenient checkpoint procedures for passengers. Passengers to Malaysia would go through immigration checks prior to boarding the train, allowing trains to run uninterrupted from Singapore to destinations in Malaysia. Passengers arriving in Singapore would only go through immigration procedures for Malaysia and Singapore after arriving at Tanjong Pagar.

Deadlock

The 1990 POA states that the Tanjong Pagar railway station would be moved either to Bukit Timah first, or directly to Kranji. In exchange three parcels of railway land—at Tanjong Pagar, Kranji, and Woodlands—would be jointly developed on a 60–40 basis with the Malaysian government holding the larger share. However, three years later, Prime Minister Mahathir expressed his displeasure with the POA as it failed to include a piece of railway land in Bukit Timah for joint development.

Malaysia's subsequent reluctance to go ahead with the 1990 agreement was based on the fear that it might eventually be forced to give up proprietary control over some or all of KTM's land in Singapore.

Checkpoint relocation

This issue has invariably become linked to Malaysia's CIQ checkpoint at Tanjong Pagar.

In 1993, both countries had agreed to move their CIQ facilities in Tanjong Pagar to the Woodlands Train Checkpoint at the northernmost point of the island by 1 August 1998. The agreement was reached outside the context of the 1990 POA. KTM had also worked with Singapore on re-aligning its railway tracks at Woodlands when Singapore built a new immigration checkpoint there to replace the old checkpoint, and with new facilities to carry out train passengers' immigration clearance at the point of entry into Singapore rather than at Tanjong Pagar.

However, in June 1997, while stating that the 1990 POA would come into effect only after it decided to relocate Tanjong Pagar station, Malaysia also informed Singapore that it had changed its mind on the relocation of the CIQ and decided not to co-locate its CIQ with Singapore's at Woodlands Train Checkpoint (WTCP) but to remain at Tanjong Pagar.

In April 1998, Singapore informed Malaysia that it would be moving its CIQ operations to Woodlands while Malaysia would have to move its CIQ out of Singapore from 1 August 1998. Malaysia requested, instead, that space be made available at the WTCP, as an interim arrangement, for Malaysian immigration officials to operate from there and thereby overcome the problem of sequence of exit and entry stampings by Singapore and Malaysia immigration authorities.

According to a press release from the Ministry of Home Affairs of Singapore dated 24 July 1998:

• Singapore will allow Malaysian customs officials to operate at Tanjong Pagar railway station. Singapore officials will be present at Tanjong Pagar railway station to lend their authority to Malaysian customs officials during the interim period.
• Singapore has agreed to Malaysia's request to allow Malaysian Immigration to put some desks for its immigration officers on the passenger platform at WTCP to clear passengers after Singapore has cleared them for exit from Singapore. Singapore Immigration must clear departing passengers for exit from Singapore before Malaysian Immigration clears them for entry into Malaysia. Otherwise, the sequence of immigration clearance will be illogical and it will cause problems in crime investigation and prosecution. These interim arrangements will overcome the problems which would be caused if Malaysian Immigration were to remain in Tanjong Pagar railway station.^[1]

However, Malaysia refused to have its immigration clearance on the passenger platform. It insisted that Malaysian Immigration should be inside the building at WTCP. If this was not possible, they said that Malaysian Immigration would remain at Tanjong Pagar.

Singapore argued that Malaysia's decision to locate its Immigration Control Post in Singapore is not in compliance with Malaysia's own law. Under Malaysian law, it is Johor Bahru railway station, not Tanjong Pagar, that is gazetted as an Immigration Control Post for persons travelling by train from Singapore to Malaysia. Singapore also pointed out that this was confirmed by the endorsement on the passports of passengers boarding the train at Tanjong Pagar, which showed:

MALAYSIA IMMIGRATION
JOHOR BAHRU
SOCIAL/BUSINESS VISIT PASS
Reg. 11. Imm. Regs 63
[Date]"
Permitted to enter and remain in West Malaysia and Sabah for one month from the date shown above^[2]

Singapore also maintained that using international conventions and legal practice, any exercise of sovereign rights by Malaysia on Singapore's territory, such as the stamping of passports, can only be done with the sufferance of the Government of Singapore. Since both parties had agreed to move the CIQ facilities to Woodlands, it was improper of Malaysia to detract from this agreement and continue to operate from Tanjong Pagar without the consent of the Singapore government.

Singapore argued that the two issues were separate: ownership of KTM land as opposed to exercising sovereign rights by another state on Singapore's sovereign territory. Singapore Foreign Minister Professor S Jayakumar informed the Singapore Parliament on 31 July 1998 that in a 17 July meeting between officials of both sides, the Malaysian delegation fully understood that the CIQ and POA were separate issues, and hence there was no question of Singapore taking back KTM land merely by relocating its CIQ to Woodlands.

On 1 August 1998, Singaporean Immigration ceased operations in Tanjong Pagar and moved to WTCP while Malaysian Immigration continued operating in Tanjong Pagar. Malaysia decided not to endorse the passports of outgoing rail passengers from Singapore and promised to provide legal arguments to show that Malaysia's CIQ has the legal right to stay at Tanjong Pagar.^[3]

The immigration clearance procedure which resulted from the impasse, and which is currently being practised until railway and CIQ operations cease by 1 July 2011, is:

• Towards Singapore, Malaysian immigration officers carry out immigration clearance on board the train at Johor Bahru railway station. After clearing immigration, the train crosses the causeway and stops at WTCP, where all passengers must proceed to Singapore Customs and Immigration. Therefore, travellers entering Singapore by rail are following the correct order of immigration clearance, that is, exit granted by Malaysian Immigration in Johor and entry granted by Singapore Immigration in Woodlands. After clearing immigration at Woodlands, passengers may disembark or continue their journey to Tanjong Pagar by train.
• Towards Malaysia, passengers must board the train at Tanjong Pagar and clear Malaysian Customs and Immigration before boarding. The train travels about 30 minutes to WTCP and stops for another 30 minutes to allow sufficient time for passengers to clear Singapore Immigration. In this case, passengers are granted entry into Malaysia before clearing Singapore Immigration, which is contrary to international practice. To circumvent this problem, Malaysian immigration officers do not stamp on passengers' passports.

Thawing of relations

An agreement in September 2001 nevertheless helped resolve this thorny issue which provided sufficient latitude to be exploited for political purposes in times of economic or political difficulties. Both governments have reached an understanding on the Malaysian immigration checkpoint on the Kuala Lumpur-Singapore railway line, which is to be moved from Tanjong Pagar to Kranji. The issue over Malayan Railway land—a very sensitive one for Kuala Lumpur—was then thought to be resolved by Singapore's agreement to offer Malaysia another twelve plots of land in Bukit Timah (as mentioned earlier). The linkage between an agreement on water and an agreement on land concessions should not go unnoticed — hence, the need for a package deal as the most realistic as well as constructive approach to bilateral relations.^[4]

Little was heard subsequently until May 2009 when it was reported that both countries now agree to seek a timely resolution to the long-standing issue.^[5]

In September 2009,Malaysian press reported that Singapore had submitted a new proposal to Wisma Putra (Malaysia) the month before, calling for an exchange for land in Marina South (near the Marina Bay Sands), to be jointly developed by both countries on a 60–40 basis (Malaysia holding the larger stake), rather than the previous proposal of scattered parcels in the island.The Malaysian customs and the freight yard will be moved from Tanjong Pagar to Kranji while the Bukit Timah railway station will be the future terminus station for KTM intercity trains.In future, when the north-west region of Singapore becomes more developed, the railway station will have to be moved to Kranji, adjacent to the relocated Malaysian customs and freight yard. A new meeting will be held in mid-October 2009 to settle this.

Meanwhile, the Urban Redevelopment Authority (URA) of Singapore had decided in 2008 that the Bukit Timah railway station will be relocated to a site at Hindhede Walk, in Bukit Timah and approximately a 5-minute walk from the Beauty World MRT Station. This is shown in the Master Plan 2008 published by the URA and found on its website. Also, according to the Master Plan 2008 the land at Tanjong Pagar will be taken back by Singapore and will redeveloped with a new MRT station on the North East Line to serve these developments.^[6]

Agreement reached

Points of Agreement Supplement

On 24 May 2010, Malaysian prime minister Najib Razak and his Singaporean counterpart Lee Hsien Loong, after a leaders' retreat in Singapore, announced that the two sides had reached an agreement on outstanding issues concerning the 1990 POA, thus breaking the 20-year-old deadlock.

Calling it a "supplement" to the 1990 POA,^[7] the two leaders agreed that:

• On the issue of relocation of the Tanjong Pagar Railway Station:
  • KTM would move out of the station and relocate to the Woodlands Train Checkpoint (WTCP) by 1 July 2011
  • Malaysia would also set up a customs, immigration and quarantine facility at WTCP
  • Singapore would facilitate the relocation to the WTCP and ensure bus service connectivity from the KTMB Station at WTCP to a nearby Mass Rapid Transit Station for the convenience of train passengers
  • The passenger terminal building would be conserved given its historical significance and would be a centerpiece for the new proposed development on the site
  • In addition, the old Bukit Timah Railway Station building at Blackmore Drive can also be conserved.
• On the issue of railway land after relocation:
  • A company known as M-S Pte Ltd would be established not later than 31 December 2010 with Malaysia’s 60% held by Khazanah Nasional Berhad and Singapore’s 40% held by Temasek Holdings Limited
  • M-S Pte Ltd would be vested with three parcels of land in Tanjong Pagar, Kranji and Woodlands, and an additional three parcels of land in Bukit Timah (Lot 76-2 Mk 16, Lot 249 Mk 4 and Lot 32-10 Mk 16) for the joint development of the said parcels
  • The parcels can be swapped for land of similar value in the Marina South or Ophir-Rochor areas in Singapore
  • The transfer of the land parcels to M-S Pte Ltd would take effect at the time when KTM vacates Tanjong Pagar Railway Station.
• On the future of the railway link between Malaysia and Singapore:
  • A rapid transit system link between Tanjung Puteri, Johor Bahru and Singapore aimed at enhancing connectivity between the two countries would be jointly developed. The rapid transit system link will be integrated with public transport services in both Johor Bahru and Singapore
  • For the convenience of commuters, the rapid transit system link would have an integrated Malaysian and Singaporean customs, immigration and quarantine facility located in Singapore with the exact location to be determined later
  • The proposed rapid transit system link would be targeted to be operational by 2018
  • Thereafter Malaysia might consider relocating the KTM station from Woodlands to Johor.

Land swap

On 22 June 2010, Lee Hsien Loong visited Malaysia to discuss the land swap issue with Najib Razak. Following the same meeting, Lee Hsien Loong sent a revised land swap offer to Najib Razak on 28 June 2010. Najib Razak accepted the offer on 17 September 2010 and Lee Hsien Loong replied on 19 September 2010 confirming his agreement.

On 20 September 2010 during a visit by Najib Razak to Singapore, he and Lee Hsien Loong issued a joint statement which stated that both Leaders have agreed to the following:

• The Singapore Government shall vest four land parcels in Marina South (TS30-361T, TS30-362A, TS30-363K and TS30-364N) and two land parcels in Ophir-Rochor (TS13-1115N and TS13-1116X) in M-S Pte Ltd, in lieu of the three parcels of POA land in Tanjong Pagar, Kranji and Woodlands and the three pieces of land in Bukit Timah. The four Marina South parcels are located at the heart of the financial and business cluster in Singapore's Marina Bay, while the two Ophir-Rochor parcels are located next to the Kampong Glam Historic District, in a new growth corridor that is being developed as an extension of Singapore's Central Business District.
• The Marina South and Ophir-Rochor land parcels shall be vested in M-S Pte Ltd for joint development when Keretapi Tanah Melayu Berhad (KTMB) vacates the Tanjong Pagar Railway Station. The station will be relocated from Tanjong Pagar to the Woodlands Train Checkpoint (WTCP) by 1 July 2011 whereby Malaysia would co-locate its railway Custom, Immigration and Quarantine facilities at WTCP.
• The Joint Implementation Team shall conclude by 31 December 2010 their discussion on the details of the implementation of the POA.^[8]

Disagreement over development charges

The two countries however could not come to an agreement over the payment of development charges to be levied by the Singapore government for the POA land in Tanjong Pagar, Kranji and Woodlands. Development charge is a tax on the enhancement in land value resulting from the approval of a higher value development proposal. Malaysia believes the POA renders the charge inapplicable to these three parcels, but agreed to the tax for the Bukit Timah parcels which were not covered in the POA. Singapore on the other hand believes it still applies and must be considered to determine a land swap of equivalent value.^[9]

Both leaders have agreed to bring the matter for arbitration at the Permanent Court of Arbitration. They further agreed to accept the arbitration award as final and binding.^[10] The arbitration will proceed on its own track and shall not affect the implementation of the POA and the other bilateral initiatives agreed in the Joint Statement of 24 May 2010.

On 31 October 2014, The Permanent Court of Arbitration ruled in favour of Malaysia that the development charges for the three parcels need not to be paid.^[11][12]

References