Govt determined to revise Singapore raw water price

By P PREM KUMAR & ALIFAH ZAINUDDIN / Pic By BLOOMBERG

The government is not backing down in its pursuit to renegotiate the price of raw water sold to Singapore, said Deputy Foreign Affairs Minister Datuk Marzuki Yahya.

Marzuki said the matter will be brought up to the Singapore government during Prime Minister Tun Dr Mahathir Mohamad’s upcoming visit to the city-state on Nov 12.

“The Malaysian government is very committed and firm in our stance on this issue. We will not succumb to any pressure or resentment (from Singapore), and we will continue to have discussions on this matter,” he said at the Dewan Rakyat yesterday.

Marzuki was responding to MP Mohd Shahar Abdullah (BN-Paya Besar) who asked about efforts that are taken to have an additional agreement to review water prices in accordance with provisions stipulated in the Water Agreement 1961 and 1962.

Mohd Shahar pointed out that if the agreement is left unrevised until it expires in 2061, the country will lose RM1.8 billion over the next 43 years.

The water agreement entitles Singapore to draw up to 250 million gallons a day (mgd) of raw water from the Johor river daily.

In return, Johor is entitled to a daily supply of treated water of up to five mgd or 2% of the water supplied to Singapore.

Singapore pays three sen per thousand gallons of raw water, and sells treated water back to Johor at 50 sen per thousand gallons.

The 1961 and 1962 water agreements provided for a price review after 25 years — in 1986 and 1987 respectively. However, Malaysia chose not to review the price then. The treaty also contained provisions that make clear Malaysia cannot unilaterally raise the water price anytime it wants.

Dr Mahathir had previously described the three sen per thousand gallons price tag as “ridiculous” and said by comparison, Johor sells water to Melaka at 30 sen per 1,000 gallons — a rate he described as “charitable” given it is a domestic deal.

He said he was seeking to hike the price of water sold to Singapore by 10 folds as Malaysia looks for ways to pay off its massive debt.

In an interview with a foreign news media recently, he said the decades-old treaty governing the water agreement needs to be revised to reflect increases in the cost of living.

The Singapore government, in turn, claims that Malaysia is profiting from treated water it acquires from across the Causeway. The republic said it costs Singapore RM2.40 to treat every thousand gallons of water.

By selling it back to Malaysia at 50 sen, Singapore is providing a subsidy of RM1.90 per thousand gallons of water.

It added that the Johor state government sold treated water to Johoreans at RM3.95 per thousand gallons, which amounts to RM46 million in profit a year.