Malaysia lost its right to review price of water - Singapore

KUALA LUMPUR: Singapore Foreign Affairs Minister K. Shanmugam told the Singapore Parliament on Thursday that Malaysia had lost its right to review the price of raw water sold to the republic since it chose not to do so in 1987.

He said this was decided in the 1962 Water Agreement between the two countries.

“Singapore’s position is that Malaysia has lost its right to review the water prices. The Water Agreement provided for the review after 25 years. Specifically, there was a right to review the price of water jointly in 1987,” he said, responding to a question in Parliament on whether Malaysia can raise the price of raw water sold to Singapore at any time before the agreement expires in 2061.

“However, Malaysia consciously chose not to review the price. It had good reasons for it,” he said, adding that Malaysia benefited greatly from the current pricing agreement.

He said the republic also welcomed Foreign Minister Datuk Seri Anifah Aman’s statement that the country would keep its side of the bargain in the agreement and that any review on the matter can only be carried out if Singapore was agreeable to it.

He said under the agreement, neither country could unilaterally change the price of raw water sold to Singapore or any of the terms in the agreement.

“This is no ordinary agreement. It was guaranteed by both the governments in the Separation Agreement in 1965, which was registered at with United Nations. Both countries have to honour the Water Agreement and the guarantee in the Separation Agreement,” he said in his reply.

“Any breach to the Water Agreement would also be a breach of the Separation Agreement and of international law,” he added.

Shanmugam said Malaysian leaders have acknowledged that the country had benefited from the current arrangement, which was why it decided not to review the water prices in 1987.

He said the then Prime Minister Tun Dr Mahathir Mohamad had said in 2002 that Malaysia did not revise the water pricing when it was due because they thought Singapore would also revise its price of treated water.

Shanmugam said if Malaysia had reviewed the water price in 1987, Singapore would have made different investment decisions like the Linggiu Dam project of 1990.

He said since Malaysia did not review the price, Singapore had made other actions like building the Linggiu Dam, costing over S$300 million, which he said had also increased the yield of Johor River, enabling both the countries to draw water from it during dry season.

Last month, the Johor state government has asked that the issue of the price of raw water supplied to Singapore becomes part of the agenda for discussions in the joint meeting between the two countries.

According to agreements signed in 1961 and 1962, Singapore's Public Utilities Board (PUB) would buy raw water from Johor at the rate of three sen every 1,000 gallons.

Singapore on the other hand would sell treated water to Johor at the price of 50 sen for every 1,000 gallons.

According to the Chairman of the State Public Works, Rural and Regional Development Committee Datuk Ir Hasni Mohammad, Johor sells 250 million liters of raw water to Singapore every day and bought back two percent of that or five million liters in the form of treated water.

The treated water from Singapore is supplied to residents in parts of Johor Baharu as well as Pontian and Kota Tinggi.

Shanmugam said the 50 sen per 1,000 gallons is only a fraction of the true cost to Singapore for treating water, including building and the maintenance of the entire infrastructure of water purification plants.