Malaysia’s Natural Resources Minister says Singapore is buying water at an ‘unreasonable’ rate that is ‘too cheap’

The demand for water in Johor Bahru is expected to increase to 1,135 million litres per day in 2020, Malaysia’s Water, Land and Natural Resources Minister Datuk Dr A. Xavier Jayakumar said.
The Straits Times

Singapore should be more open towards Malaysia’s plan to revise the current “unreasonable” and “cheap” rate for raw water supply to the city state, Malaysia’s Water, Land and Natural Resources Minister Datuk Dr A. Xavier Jayakumar has said, according to a Bernama report.

“We need to do something because the rate is unreasonable and too cheap compared to raw water price in other countries,” Bernama quoted the minister as saying in Parliament on Tuesday (Nov 12).

Singapore currently buys water from Johor at 3 sen (1 Singapore cent) per 1,000 gallons of water.

According to Dr Xavier, China has been selling water to Hong Kong at RM14.50 per 1,000 gallons, and to Taiwan at RM5.80. Even raw water sale at the domestic level from Pahang to Selangor (RM0.46 cents) and from Johor to Melaka (RM0.50 cents) are at higher rates, he said.

The revision is needed to address water supply in Johor, and to combat climate change issues, which would influence the availability of water, the Malay Mail quoted Dr Xavier as saying.

The 66-year old explained that water stress in Johor would affect Singapore as well, and that in times of emergency, the Government would prioritise Johoreans over Singaporeans.

The minister also said that under clause 14 of the 1962 Water Agreement, price revisions can be made every year after the agreement was signed. This means that Malaysia still reserves the right to adjust water prices, he reportedly said.

The Singapore government has maintained that Malaysia lost its right to review the price when it chose not to do so in 1987.

“The 1962 Water Agreement provided for a price review after 25 years. Specifically, there was a right to review the price jointly in 1987. Malaysia, however, did not exercise this right in 1987,” a government-run website says.

“Since the right to review has lapsed, neither Singapore nor Malaysia can unilaterally change the price of water sold to Singapore.

“In the event Malaysia chose not to review the water price in 1987, and on that basis, Singapore then took several actions which also benefitted Malaysia. This included building the Linggiu Dam at the cost of over S$300 million, which has increased the yield of the Johor River,” the factsheet on Gov.sg added.

Johor needs to meet own demand for water

A long dry spell and high demand for raw water at the rapidly developing Johor Bahru and Kota Tinggi areas are causing water supply issues for Johor, the Malay Mail reported.

In addition, the reserve margin rate for raw water in Johor stands at four per cent, which is much lower than the limit of between 10 and 15 per cent set by Malaysia’s National Water Services Commission (SPAN).

“Come 2020, the demand for water in Johor Baru is expected to increase to 1,135 million litres per day, and the reserve margin for treated water is expected to hit zero, zilch, in the third quarter of 2020,” Malay Mail quoted Dr Xavier as saying.

Mitigation efforts to address the issue of treated water supply is also gravely needed, he said.

The latest in a series of complaints over “morally wrong” water agreement

Malaysia has long taken issue with Singapore over the issue of water price.

In February, Prime Minister Tun Dr Mahathir Mohamad said that the water agreement with Singapore was “morally wrong” and that the “rich” country of Singapore had been benefitting from “poor” Malaysia.

The 94-year-old premier accused Singapore of making a profit with the high pricing of its desalinated water, which Johor is purchasing at RM0.50 per 1,000 gallons.

 

Mahathir also said earlier this month that he wanted to resume negotiations with Singapore over water price. “One day of delay in discussing this matter means we lose millions, in fact it can even reach a billion ringgit,” he was quoted by The Star as saying.

The 1962 Water Agreement ends in 2061, and allows Singapore to draw up to 250 million gallons a day (mgd) of raw water from Sungai Johor.

In return, Johor is entitled to buy up to about 5 mgd of treated water, at 50 sen per thousand gallons, which Singapore has said is “only a fraction of the true cost to Singapore of treating the water”.

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