SINGAPORE AND MALAYSIA SIGN LAND RECLAMATION

UNCLAS SINGAPORE 001543

SIPDIS

E.O. 12958: N/A
TAGS: PREL SENV MY SN
SUBJECT: SINGAPORE AND MALAYSIA SIGN LAND RECLAMATION
SETTLEMENT AGREEMENT

REF: A. 02 SINGAPORE 1267

B. 04 JAKARTA 10224


1. A costly two-year dispute with Malaysia over Singapore's
land reclamation activities in the Johor Strait ended on
April 26 when Singapore Ambassador-at-large Tommy Koh and
Malaysia Secretary-General Tan Sri Ahmed Fuzi Abdul Razak
signed the "Settlement Agreement of the Reclamation Case".
Singapore Foreign Minister George Yeo described the
settlement as a sign of improved bilateral relations between
the two nations, and anticipated that Singapore and Malaysia
would amicably resolve other ongoing bilateral issues,
including the price of water supplied to Singapore by
Malaysia, a Malaysian plan to replace the causeway across the
Singapore Strait with a modern bridge, and the disposition of
a Malaysian railway line that runs into Singapore.


2. The Agreement concludes the case brought by Malaysia in
September 2003, in the Hamburg-based International Tribunal
for the Law of the Sea, accusing the GOS of not consulting
Malaysia about its land reclamation activities in the Strait
of Johor and raising concerns about their effects on
navigation and the environment. (NOTE: After the 13-month
study, an independent panel of experts issued a unanimous
report that Singapore's reclamation actions presented no
major environmental ramifications. END NOTE)


3. Under the Agreement, both governments pledge to undertake
various initiatives to mitigate Malaysia,s concerns,
pursuant to the recommendations of a group of independent
experts appointed by both governments to study the effects of
Singapore's reclamation works. Malaysia will drop its
lawsuit, and grant Singapore the right to reclaim as much
land as it needs for development within its territorial
waters. In return, Singapore has agreed to do the following:

-- Revise its reclamation plans to protect sea currents and
pay S$300,000 (US$182,300) for maintenance works at
Malaysia's Tanjung Belungkor jetty.

-- Make a one-time payment of RM$374,400 (US$98,550) to
local Malaysian fisherman to compensate them for loss of
income.


4. COMMENT: Singapore is unlikely to quickly revive the
project to create 49 square miles (19 square km) of new land
in the straits. While resolution of its dispute with
Malaysia is welcome, Singapore has faced a shortage of
available sand vital to its reclamation ambitions since its
principle supplier, Indonesia, barred sand exports to
Singapore in 2003. Ministry of National Development Senior
Corporate Communications Executive, Ms. Senbagavalli
Arumugam, told EconOff that reclamation works will continue,
adding that the onus is on commercial contractors hired by
GOS to procure materials for the project, which may be
equivalent to a "don't ask, don't tell" policy. END COMMENT.

FERGIN