Some people asked why Singaporeans pay so much for water when we buy it for 3 sen per 1000 gallons from Malaysia

By June 26, 2018Current

TL;DR – Unless you want to drink raw water from Malaysia…

In an interview published by Bloomberg, Dr Mahathir said that he would be seeking to renegotiate a longstanding  water supply agreement with Singapore. Dr Mahathir mentioned that Malaysia sells water to Singapore at RM0.03 per 1000 imperial gallons.

(Dr Mahathir speaks about Singapore from 3:00)

Some correspondent of an online publication in Singapore picked that up and asked this question:

“Can PUB explain how we’re charged 550 times more after buying water from M’sia at 3 sen per 1,000 gallons?”

Totally silly question. Does this person think we can drink the raw water straight from buying from Malaysia? Or does this person think it doesn’t cost money to purify and treat the water?

It costs money to purify water

The water that we get from Malaysia is raw water. Muddy, dirty raw water. Water that would otherwise have gone from the river to the sea. Yes, the sort of water that will probably give you dysentery and cholera if you drank it. To turn that water into the pristine water that we can drink straight from the tap that we have in Singapore, we need to purify it.

It’s not cheap to purify water. I repeat, it’s not cheap to purify water.

Singapore Ministry of Foreign Affairs (MFA) revealed back in 2003 that the real cost of purifying water back in 2003 is RM2.40 per 1,000 gallons.

Given the exchange rate back in 2003, the real cost of purifying water back in 2003 is SGD1.09 per 1,000 gallons, which works out to be about SGD0.24 per cubic metre.

It costs money to pump water to the tap in our homes

That doesn’t include the price of distribution of water. Yes. It costs money to build and maintain the facilities to store and pump the water so that we can have the luxury of having clean, pristine, drinkable water from the taps in our homes.

READ MORE:  Everything you need to know about the Singapore-Malaysia Water Agreements

And then we still have to account for inflation since 2003. Put together, you have to be a fool to still think the total cost of water is only RM0.03.

Some of our water is from more expensive sources

There’s more. Not all the water that flows from our tap comes from Malaysia.

Over all this time, we have had a total of four Water Agreements with our nearest neighbour, and two of them had already expired (namely, the 1927 and 1961 agreements). What we have running right now are the 1962 and 1990 Water Agreements which will expire in 2061.

Some of you might remember how back in 1998, Dr Mahathir had called Singapore “arrogant and insensitive” and he also said at a rally in Johor, “Malaysia’s nature is to be good to all … but don’t take for granted our good nature…” The crowd responded eagerly with cries of, “Cut, cut, cut!”

And then at the end of 2002 and early 2003, we also experienced intense tension when our closest neighbour threatened war on us.

Considering how Malaysia has been blowing hot and cold at us, how they would try and re-negotiate prices from time to time, our Government has long decided we should be as self-sufficient as possible when it comes to water. We really cannot afford to have our closest neighbour be our only or key source of water supply when they’d threaten us or use us as the bogeyman ever so often.

Water Price Dispute


Our Government likes to refer to our sources of water as our four National Taps:

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  • – Imported water from Malaysia,
  • – Water from our local water catchment areas,
  • – Desalinated water,
  • – Recycled water (NEWater)

  • Today, 65% of our water supply comes from NEWater and desalinated water. The cost of producing NEWater and desalinated water is far higher than purifying water we buy from Malaysia. Add all those in, you have to be a really big fool to still think that the total cost of water that flows from our tap is only RM0.03.

    Those who were up in arms when the Government announced that water prices were to be raised should wake up their idea now. Minister Chan Chun Sing said in Parliament that water is existential. He asked:

    “How many more desalination plants and NEWater plants must we build in order for water to never be a weapon pointing at our head?”

    Thankfully, we have invested in capabilities to produce our own water. We are still some way away from being self-sufficient. That’s why we have to increase our investment so that no one, not Dr Mahathir, not anyone, threaten to disrupt our water supply.

    Ideally, we should be a lot closer to being self-sufficient come 2061 when the Water Agreements come to an end. Under national water agency PUB’s masterplan, NEWater and desalination will meet 85 per cent of Singapore’s water demand by 2060. That is also when the total water demand is expected to double.

    In Singapore, water is priced not only to recover the full costs of its supply and production, but also to incorporate the higher cost of producing water from unconventional sources, specifically NEWater and desalinated water.

    But now we are in a stronger position to negotiate

    And because we have invested in the capabilities to produce our own water, we don’t have to roll over and give whatever Dr Mahathir demands of us. Maybe Dr Mahathir knows this too. Maybe Dr Mahathir does intend to honor the water agreement and not change the price that they sell water to us. That’s the theory expressed by Mr Bilahari Kausikan, former Permanent Secretary of MFA.

    (Dr Mahathir is) raising water only as a diversionary tactic in preparation to ask for a waiver or reduction of the compensation due to us if he formally cancels the high-speed rail project. His intention is to make the Singapore government look unreasonable hoping, first, that Singaporeans will pressure our government on his behalf, and, second, to set up an alibi with his own people.”


     

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    And we should heed Mr Bilahari’s advice –  Singaporeans should not be deceived. Inasmuch as we want to be good neighbours, and wish that Malaysia under the new government do well, we need to remember that good neighbourliness ought to be a two-way street.

    If Malaysia, or any other country for that matter, does anything to threaten our interests, we MUST unite and stand strong.

    Meanwhile, I’ll leave you with a video of the Singapore Water Story,


     

    Recommended Reads

    1. Everything you need to know about the 4 Water Agreements
    2. Overview of Water Treaty
    3. Facts and Debunking Myths (MFA)
    4. Dr M threatened us in 1998
    5. Dr M threatened us in 2002/3
    6. Water Talks (MFA)
    Contains Ministerial Statements and Official Correspondence and Documents; or download here

     

     

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    CRC

    Author CRC

    Working on a startup is a scary crazy process. To destress, I write random stuff.

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