SINGAPORE (July 9): Malaysian Finance Minister Lim Guan Eng said that the country will stick with its longstanding agreement with Singapore on water supply even after Prime Minister Mahathir Mohamad had suggested a renegotiation, Singapore’s Sunday Times reported, citing an interview with Lim.

“We will keep to our end of the bargain,” Lim was cited as saying after an interview on July 2, although he described the 1962 deal as “lopsided”. Under the pact, the island city-state is allowed to buy a set volume of water from Malaysia at a set
price, with some sold back to its bigger neighbor. Over the years, the agreement has been the source of frequent public wrangling.

Since ousting former Prime Minister Najib Razak in May, Malaysia’s new government has been looking to renegotiate a number of deals with its neighbor, as well as reviewing
infrastructure projects, saying it had found Malaysia was more indebted than had been disclosed. In an interview with Bloomberg Television last month, Mahathir criticized the 1962 deal, saying it was too costly and was an issue that needed to be settled.

Among the projects now under review is a high-speed rail line linking Kuala Lumpur with Singapore. The venture connecting the two cities could go ahead if the cost were significantly reduced from the current estimate of RM110 billion ($27.2 billion) including interest, Lim was cited as saying.

Lim also said he has given his ministry 100 days up to the middle of August to “clear through” questionable deals agreed by the previous government, according to the report.

http://www.theedgemarkets.com/article/lim-guan-eng-malaysia-abide-water-pact-singapore