SINGAPORE: A recent decision by the Permanent Court of Arbitration on issues relating to development charges under the Points of Agreement (PoA) on former Malayan Railway (KTM) parcels of land in Singapore was a favourable result for Malaysia, Knowledge Management ZICOlaw partner Paul Subramaniam said.
He said the land swap deal enabled the two countries to break the impasse on the relocation of the Tanjung Pagar Station in Singapore, belonging to KTM, to Woodlands.
Subramaniam noted that Prime Minister Datuk Seri Najib Razak and his Singapore counterpart Lee Hsien Loong had in 2010 agreed that the Tanjung Pagar site and KTM parcels of land in Kranji, Woodlands and Bukit Timah in Singapore would be exchanged for land in Ophir-Rocher and Marina South, also in Singapore.
The Kranji, Woodlands and Bukit Timah sites were to be developed by a company called M+S Pte Ltd, a 60:40 joint venture between Khazanah Nasional Bhd and Singapore’s Temasik Holdings.
“The agreement between the two prime ministers was underlined in the PoA. However, a dispute then arose over the interpretation of the PoA as to whether Singapore could impose the standard land development charge on the three sites estimated at S$1.4 billion [RM3.61 billion),” Subramaniam told Bernama.
The issue was referred to the Permanent Court of Arbitration by both the parties involved.
On Oct 30, the court concurred with Malaysia’s interpretation of the PoA and ruled that Malaysia would not have to pay all or any land development charges for the Kranji, Woodlands and Bukit Timah sites to Singapore.
“It is a victory for Malaysia in that sense, but more importantly, it allows the development, which had stalled due to the differences in the interpretation of the PoA between Malaysia and Singapore, to go ahead.
“As had been stated, the development would benefit both countries through the Khazanah Nasional and Temasik Holdings joint venture vehicle, M+S Pte Ltd,” Subramaniam said.
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This article first appeared in The Edge Financial Daily, on November 6, 2014.