Malaysia, Singapore still on track to resolve rail dispute

Malaysia, Singapore still on track to resolve rail dispute

By Valerie Lee

SINGAPORE (Reuters): One Malaysian minister called it a "goodwill train", while analysts joked about bilateral ties not being derailed.

But the eleventh-hour way in which Malaysia and Singapore avoided a face-off over railway immigration facilities this weekend threw into sharp relief the often fractious relations between the two ASEAN neighbors -- and the way many bilateral issues heat to a simmer but never quite boil over.

Last Saturday the most recent diplomatic row between both countries, over the location of railway immigration facilities, was defused, or at least ratcheted down a few notches.

Malaysian immigration officials at the Tanjong Pagar station in downtown Singapore did not stamp passports of departing passengers, preventing a showdown with Singapore officials.

Singapore had said there could be difficulties for departing passengers at its own new facilities on the north side of the island if their passports already had Malaysian endorsements. But with Malaysia choosing to process passengers without stamping passports, immigration and the trains ran smoothly.

Singapore wants Malaysia's immigration operation to move out of Tanjong Pagar in downtown Singapore to the new station at Woodlands on the northern border, but the two sides had been unable to agree on arrangements.

The Malaysian state-owned railway Keretapi Tanah Melayu (KTM) owns about 200 hectares (500 acres) of Singapore land under a 1918 agreement drawn up by the British colonial authorities. The agreement gave the company the land for as long as it operated train services.

Singapore television quoted officials from Malaysia as saying the new immigration measures for rail passengers were interim and only for the next three months.

"They have left something open-ended, somewhere. But whatever it is, at least it is a relief that there was no international incident," Malaysian opposition leader Lim Kit Siang told Reuters.

"There is a need for both governments...to act with restraint and not to aggravate and escalate the tension," Lim said.

"The most sensible thing for both sides to do is just simply keep quiet for a while," said a Singapore analyst. "What Malaysia did was very sensible. At least coolness prevailed."

Temperatures were a notch higher than cool in Singapore's parliament last Friday on the eve of the railway facilities move. Singapore members of parliament, opposition and ruling party alike, questioned what they saw as Malaysia's test of the city- state's sovereign rights and patience.

An editorial in the last Saturday edition of the Straits Times newspaper jumped into the fray, commenting on Malaysia's "bristling nationalism".

"...however it plays out, one thing is already clear: Singapore is the chief target of Malaysia's descent into muscular nationalism and deliberate brow-beating, aimed at testing the Goh Chok Tong government."

It said that on issues from developing Malaysian railway land in Singapore, to water negotiations, to the transfer of the railway facilities, "Kuala Lumpur has displayed a worrying disregard for the normal courtesies and proprieties that should obtain in relations between sovereign states."

As Singapore sees it, the issue of Malaysia keeping its word is the sticking point in a range of agreements the city-state wishes to finalize on such matters as the guarantee of water supply for Singapore, development of the railway land and the freeing of funds that expatriate Malaysian workers in Singapore put into the city state's compulsory pension fund scheme.

Analysts said Malaysian leaders have looked to Singapore as a possible source of investor funds to help it out of the current economic crunch.

Resource-needy Singapore, on the other hand, would like a "formal, legally binding water agreement" from Malaysia from which it currently buys the bulk of its supplies.

"The problem is Malaysia gets the money now and we get the water past 2061. if they flip-flop on (immigration facilities), can the Singapore GLCs (government-linked corporations) and the government give money now as part of the trade-off to help each other?" said Singapore nominated member of parliament Simon Tay.

"That is part of the dilemma that anyone in the Singapore government must be thinking about," Tay said.

Finger-pointing and heated rhetoric have marked relations between the two countries since Singapore's separation from the Malaysian Federation in 1965.

But political analysts are optimistic there is light at the end of the tunnel as far as an amicable settlement between the two countries is concerned.

"I think both sides wanted to make a point over the railway issue, and after they have made their point they'll go back to negotiations and come up with a resolution," said Bruce Gale, regional manager of the Political and Economic Risk Consultancy.