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What the railway land dispute is about

1990: Then Prime Minister Lee Kuan Yew and Malaysia’s then Finance Minister Daim Zainuddin signed a Points of Agreement (POA), under which the Malayan Railway station would vacate the land at Tanjong Pagar — later referred to as Keppel — and relocate

1990: Then Prime Minister Lee Kuan Yew and Malaysia’s then Finance Minister Daim Zainuddin signed a Points of Agreement (POA), under which the Malayan Railway station would vacate the land at Tanjong Pagar — later referred to as Keppel — and relocate

The vacated land, together with two parcels at Kranji and Woodlands, would be vested in a joint venture company and developed as residential and commercial land. In exchange, a plot of land of equivalent value in Marina South will be offered to the company.

2010: The POA was followed by an impasse of 20 years, as Singapore and Malaysia could not agree on several of its clauses. In 2010, Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak agreed on a landmark land swap deal. The three plots of ex-railway land — Keppel, Kranji and Woodlands — and another three plots in Bukit Timah, would be exchanged for four parcels of land in Marina South and two parcels of land in Ophir-Rochor.

A new company, M+S, was formed to develop the Marina South and Ophir-Rochor parcels. Malaysia’s Khazanah Nasional held a 60 per cent stake in the company and Temasek Holdings held the remaining 40 per cent.

As the Bukit Timah parcels were not covered by the POA, Malaysia agreed development charges were payable for these plots. However, they disputed the charges for Keppel, Kranji and Woodlands. Both sides agreed to settle the matter through arbitration under the Permanent Court of Arbitration at The Hague.

SINGAPORE ARGUED:

• Both parties agreed to creating a joint venture to develop the three POA parcels, subject to Singapore’s development laws. This includes the need to obtain planning permission. As a precondition, the laws here require the company to pay development charges.

• During negotiations in and after 2008, Malaysia agreed or appeared to agree that development charges would be payable; therefore it cannot assert otherwise.

MALAYSIA ARGUED:

• A true interpretation of the POA would mean no development charges was payable.

• The POA already specified the nature of the development to be undertaken.

• The granting of planning permission did not enhance the value of the parcels; the value was enhanced under the POA, which obliges Singapore to permit the land be used for development.

• Malaysia never agreed development charges were payable on the parcels.

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