Ex-M’sia PM Najib Razak defends his railway land deal with S’pore in Facebook post
Najib cited Mothership as reference.
March 5, 08:45 am
Former Malaysian Prime Minister Najib Razak has taken to social media to appeal to public opinion among Malaysians and defend his record over the 2010/ 2011 railway land deal that he struck with Singapore.
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In case the facts have slipped your memory, here’s what went down.
The problem first began, as it often does, with the British colonial regime:
1918 transfer of land
Way back in 1918, before independent Singapore or Malaysia was a thing, the British colonial government handed over controlof more than 200 hectares of land in Singapore to the Federated Malay States Railway (FMSR).
After World War II, management of the FMSR was transferred to Keretapi Tanah Melayu (Malayan Railways or KTM).
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1990 Points of Agreement
Back in 1990, then-PM Lee Kuan Yew signed a deal called the Points of Agreement (POA) together with then-Malaysian Finance Minister Daim Zainuddin on the railway land issue.
This meant that Malaysia was supposed to vacate the Tanjong Pagar Railway Station in exchange for three parcels of land in Tanjong Pagar, Kranji and Woodlands.
Malaysia and Singapore would jointly develop the land and own 60 per cent to 40 per cent respectively.
However, the implementation of the deal did not work out under then-PM Mahathir Mohamad.
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2010 talks between Najib and PM Lee
In 2010, then-PM Najib Razak tried to tackle the issue, this time with PM Lee Hsien Loong sitting across the table.
Talks were successful, and Malaysia agreed to have KTM vacate Tanjong Pagar Railway Station, and shift its operations to Woodlands Train Checkpoint.
In return for vacating parcels of land at Tanjong Pagar, Kranji, and Woodlands, and three more parcels of land in Bukit Timah, Singapore would exchange six land parcels in Marina South and Ophir-Rochor.
These land parcels would be developed jointly by Malaysia and Singapore by a joint-venture company M+S Pte Ltd, which was 60 per cent owned by Malaysia’s Khazanah Nasional and 40 per cent by Singapore’s Temasek Holdings.
2014 court case
Now, Singapore wanted Malaysia to pay development costs for the parcels of land, due to the change in land value from the approval of high-value development projects.
Malaysia agreed to pay up for Bukit Timah, as it was not covered under the POA.
However, they did not agree to pay charges for Kranji, Tanjong Pagar and Woodlands.
Both sides agreed to submit to the Permanent Court of Arbitration at the Hague.
Singapore sought development charges of S$1.47 billion. In October 2014, a three-man Arbitral Tribunal ruled that Malaysia did not need to pay Singapore anything.
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Najib has his say
Mahathir has previously expressed his unhappiness at Najib’s deal with Singapore — and Najib has come under criticism from his political opponents.
But on March 4, Najib hit out at his critics in a lengthy Facebook post.
He makes the following claims:
Mahathir’s government failed to seal the 1990 deal
The original agreement to cease operations at KTM’s Tanjong Pagar Railway Station and return railway land to Singapore was negotiated by Mahathir’s government in 1990, and signed by Daim Zainuddin.After the agreement was signed, Mahathir’s government did not honour the deal, and instead asked for an additional three parcels of land at Bukit Timah.Singapore agreed to this, but Mahathir did not proceed with the deal due to other disputes he had with Singapore at the time.
The land
Under the 1918 Railways Act, which gave KTM the land in the first place, it was held by a 999-year leasehold and could only be used for railway purposes.As the land parcels could not be put to other purposes, they sat idle for 20 years, not earning money for the Malaysian government.In fact, they were loss-makers, as Malaysia had to pay annual land tax to Singapore.
The deal
The land that Najib negotiated in exchange at Marina South and Ophir-Rochor were far more valuable than the parcels elsewhere.The projects at these parcels were successfully completedin early 2018, and are worth billions today.They have been earning money for Malaysia, instead of lying idle like the railway land had been for 20 years from 1990 to 2010.Najib disagreed over paying development charges for some of the land parcels, and agreed to go to court.He was successful and saved S$1.47 billion for Malaysia.
In order to illustrate his point, the former PM shared a link to a Mothership article from 2014, which reported the outcome of the court case.
He concluded by saying that he had done his best to solve this long-running legacy issue while he was PM, but the current Pakatan Harapan (PH) government has “slandered” him and accused him of committing “treason” with his deal.
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Discussed this issue before
Najib’s arguments appear very similar to the ones he made in December 2018, talking about the same issue.
It’s possible he repeated them for this post.
But Najib has reason to smile.
His coalition recently won a by-election in Semenyih, Selangor, defeating the PH candidate.
And he is no stranger to using social media to gain support from the public.
You can read his Facebook post below, in Malay:
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S’pore watched $1.47 billion in revenue evaporate before her very eyes
Why losing to Malaysia in the court of arbitration in the rail-land tax case is particularly vexing.
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While most of you were not paying attention, Singapore watched as S$1.47 billion in revenue evaporated right before her eyes.
Not sure what happened? Check out the section below titled, “S’pore vs M’sia: How we lost”.
To dull this massive blow, Singaporeans were bombarded with continuous positive news coverage in The Straits Times and Today for three days from from Nov. 1 to Nov. 3, 2014, trying to soothe frayed nerves.
Here is a sample of the positive quotes from Singapore’s quarters even though we lost:
Prime Minister Lee Hsien Loong said on Oct. 31:
“It allows us to put this matter behind us. I am happy that Singapore and Malaysia have been able to resolve this dispute in this impartial and amicable way.”
“The full and successful implementation of the Points of Agreement (POA) in 2011 has paved the way for joint development projects and closer collaboration between Singapore and Malaysia. These include links in transport connectivity, and trade and investment. I look forward to making progress on them, and working with PM Najib bilaterally, and in Asean, to benefit both countries.”
——
Former Singapore high commissioner to Malaysia K. Kesavapany told The Straits Times (Nov. 1, 2014):
“At a time when maritime and territorial disputes are on the rise in the region, this is a salutary example of the manner in which such disputes can be resolved.”
——
Professor Robert Beckman, director of the Centre for International Law at the National University of Singapore, said he was pleased to read PM Lee’s statement (Nov. 1, 2014):
“This shows respect for the rule of law and for independent third-party adjudication and it is a good example for the region as a whole.”
“This is how mature and responsible states handle international dispute settlement. They put their cases before a tribunal, accept the results, and move on.”
——
Alvin Yeo, MP and member of the Government Parliamentary Committee for Defence and Foreign Affairs, felt the outcome was “proof that the consensual approach to resolving differences in views can result in a ‘win-win’ situation.” (Nov. 1, 2014):
“Any loss of revenue from the development charge would be more than made up (for) by not just the higher share of profits accrue to the Singapore side, but from the friendly relationship which is vital for any partnership to succeed.”
——
Foreign Minister K. Shanmugam said (Nov. 3, 2014):
“The process, and the way we did it, is the right way to do these things.”
“We have developments now, joint ventures in Iskandar, and they have (projects) here, all being done together. It encourages people-to-people movement, more commercial activities.”
“The two countries (are) such close neighbours, we have to find sensible ways of moving forward.”
So why should the loss feel so bad for Singapore? Because we picked the shorter end of the stick and then tried to rationalise that it is no big deal.
Here is what Singapore could have bought with S$1.47 billion:
The contract awarded to lay the foundations for Changi Airport’s Terminal 5 is worth $1 billion.
Or we could have built another National Stadium. The Sports Hub in Kallang was built at a cost of S$1.8 billion.
What made it even more vexing for Singapore to lose is that the majority stake of the M+S company is held by Malaysia and they admitted even if they paid the levy, the agreement was “a sweet deal” .
This is mostly because a new company, M+S, that was formed to develop the Marina South and Ophir-Rochor parcels has Malaysia’s Khazanah Nasional holding a 60 percent majority stake, while Singapore’s Temasek Holdings holds a minority 40 percent stake.
From ST, Nov. 2, 2014:
The three-member panel disclosed that Singapore had sought a levy of $1.47 billion, in keeping with its practice of imposing such charges when permission is given to develop land that appreciates in value. A 2008 valuation had put the value of these three plots at $2.8 billion altogether.
These plots, and three others in Bukit Timah, were swopped for six new land parcels in downtown Singapore in 2010, which are now being jointly developed by M+S.
But the tribunal also noted that during a hearing in July this year, Malaysian witness Nor Mohamed Yakcop had conceded that even with the charge, the agreement was “a sweet deal” for Malaysia.
“Equally we believe that the deal will have proved advantageous for Singapore even if we conclude that development charge is not payable,” the tribunal said.
The charge is imposed on the enhancement in land value, and Malaysia disagreed with Singapore that it had to be paid on these plots.
And to top it off, Malaysia appeared as gracious winners:
In Kuala Lumpur, Malaysian Foreign Minister Anifah Aman told ST (Nov. 1, 2014): “The understanding between both prime ministers is very good… We believe this is the way forward in dealing with disputes.”
S’pore vs M’sia: How we lost
In 1990: Singapore and Malaysia signed a Points of Agreement (POA). Three parcels of railway land in Tanjong Pagar, Kranji and Woodlands would be vested in a joint venture company and developed as residential and commercial land.
In 2010: The POA was followed by an 20-year impasse, until 2010, when Prime Minister Lee Hsien Loong and Malaysia’s premier Najib Razak agreed on a land swap deal.
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 in Ophir-Rochor.
A new company, M+S, was formed to develop the Marina South and Ophir-Rochor parcels. Malaysia’s Khazanah Nasional hold a 60 percent stake and Singapore’s Temasek Holdings hold a 40 percent stake.
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.
This charge is a tax paid to Singapore on the enhanced value of the land when planning permission is given.
In 2014: A hearing was held in London from July 15 to 18 this year, where ex-Foreign Minister George Yeo and Malaysian former Minister in the Prime Minister’s Department Nor Mohamed Yakcop testified.
A three-man Arbitral Tribunal delivered its award on Oct. 30, 2014. It said M+S does not have to pay development charges on the three parcels if these had been vested in M+S, and if M+S developed them according to the proposed land uses set out in the POA.
Singapore had sought a levy of S$1.47 billion for the three plots of land.
Now, it is getting none.
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