Malaysia got the better deal in the Water Agreements with Singapore

By March 13, 2019Current, Featured

TL;DR – It’s more than 3 sen.

Malaysia is at it again. They are talking about how unfair it is for Malaysia to be selling water to Singapore at a low price of 3 sen per 1000 gallons.

Dr Mahathir went even as far as saying that Singapore rapidly developed because they have been supplying us with water. He said:

“The rich are depending on the poor? This is not only illogical but also morally wrong.”


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Is it true that Singapore is taking advantage of Malaysia?

Malaysia would want everyone to believe so. But anyone who does is stupid. In fact, Malaysia had been, and continues to, taking advantage of us. Here’s how.

We built, and pay operational and maintenance costs

In order for Malaysia to collect and supply anyone water, there first must be some infrastructure. Without reservoirs, dams, waterworks, tanks, pipelines, aqueducts, filters, and other infrastructure, whatever water that is now supplied to Singapore would have just flown to the sea.

Not only would Malaysia not get 3 sen per 1000 gallons, they would have gotten nothing for all that water.

And do you know who pays for the construction and maintenance of all those infrastructure?

Yes, that’s right. Singapore.

How much has Singapore spent? A lot. One of the pieces of infrastructure that Singapore built in Johor to collect water is the Linggiu Dam, as well as the water treatment plant and ancillary works at the dam. Just that one piece of infrastructure alone cost Singapore SGD1 billion. That money goes to… Malaysia.

What’s more, at the end of the water agreements, all the infrastructure will go to Malaysia. In other words, at the end of the water agreements, Malaysia will get billions of dollars worth of water utilities infrastructure. Isn’t that a good deal?

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We pay a lot more than just 3 sen per 1000 gallons

All the infrastructure that Singapore has built sits on some land in Malaysia. We don’t get to use that land for free. We actually pay rent.

Under the 1961 agreement, Malaysia committed to set aside land in Gunong Pulai, Sungei Tebrau and Sungei Scudai for a period of 50 years, giving Singapore ‘the sole and absolute right to draw off and take all water available in under or upon any part of the land’ or ‘any river in under or upon’ the specified area till 2011. Singapore agreed to pay a rental of $5 per acre per annum for the land, on top of a charge of 3 sen for every 1,000 gallons of raw water it drew.

The 1962 agreement extended the 1961 agreement and included a new source: the Johor River. Singapore was required to pay rent on the land it used ‘at the standard rate applicable to building lots on town land’.

The 1990 agreement reaffirmed the 1962 deal. Under the terms of the agreement, Johor set aside land totalling approximately 21,600 ha for Singapore to construct the Linggiu project. Singapore’s PUB agreed to a premium of RM18,000 per hectare. That’s a premium of about RM389 million.

That’s on top of an annual rent of RM30 for every 1,000 square feet. In addition, it paid Johor RM320 million as compensation for loss of use of the land, as well as a ‘one-time up-front payment’ for the leasing of the land, ‘inclusive of rentals for the remaining tenure of the 1962 Johor River Water Agreement’.

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You can read more about all the four water agreements here,

Malaysia is getting money for… nothing

So it is ridiculous to say that Singapore only pays Malaysia 3 sen per 1000 gallons of water.

It’s even more ridiculous for Malaysia to say that it’s too costly for Malaysia to supply water to us. They are getting a lot of money for doing very little, if at all.

Put all of these together, who’s getting a better deal out of the water agreements? Anyone who has half a brain would come to the clear conclusion that it is Malaysia.

 

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Jake Koh

Author Jake Koh

Recovering sushi addict, I'm a man of mystery and power, whose power is exceeded only by his mystery.

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