It is ironic that Vivian used "red herring" because his arguments were full of them as well.

Let's look at Singapore's points:
1) The 1962 water agreement is a contract and contracts cannot be broken and are sacrosanct.
BS. Contracts are broken all the time. Even treaties can be broken. What follows are consequences

2) The 1965 contract is a basis of the separation and to break it calls into question the very Separation.
BS. The water agreement is not a foundational principle of the Separation but an accommodation to the Separation.
He is saying if the water agreement is not adhered to, the Separation agreement flounders. We need to distinguish between them.

3) Malaysia did not review rates in 1987 and hence has lost all right for further review.
This is debatable. Does passing on a milestone review negate any right forever to review it in perpetuity? Can be argued that Malaysia delayed a decision without prejudice.
For Singapore to say this with finality is disingenuous.

What Malaysia says:
1) This is an unfair contract. Unfair commercial contracts are brought before judicial review or arbitration all the time
2) Singapore is profiting tremendously at their own citizens' expense. Singapore always downplays this.

The reality:
1) Malaysia can choose to terminate but there are consequences. The biggest consequence is that Johor and Melaka rely on Singapore's water. If Malaysia starts building capacity here, then we can get Singapore's attention and bargain. Right now we have no leverage.
2) Malaysia can dam the water out of spite. There is no win win here so this is an immature response. But it creates leverage and uncertainty for Singapore which may help with negotiations
3) Malaysia can propose terms for extending supply if rates are backdated to today. Little strategic value as in the long run, Malaysia does not ned to $ and would still rely on Singapore to furnish water to Johor.
4) at the end, Malaysia's response has always been to tie the water to a package of agreements in the main: ILS Seletar, Johor port harbour limits, KYM land, CPF of West malaysians etc etc

The unknown:
LKY's Singapore hsa said they would defend and go to war over water. The Singapore armed forces strategy has always been to hold ground in Johor for 72 hours and sue for peace.
This doctrine is questionable today. Singapore has always had the hardware to do so but what has changed is how interconnected its economy is to the rest of the world. Before it was port shipping, whichSingapore could protect with its navy. But today, Singapore runs and trades on sentiment and services. The moment the first bullet is fired, Singapore's knowledge economy will be ruined and may never recover. Investors will flee, its sizeable foreign expertise will run and its primary mechanism of inflation management, the S$ will collapse. Malaysia can hunker down for the long term. A war, even if limited and precise, will hurt Singapore irreparably.