SINGAPORE — July 9, 2018: Singapore will fully honour the terms of the 1962 Water Agreement with Malaysia, including the price of water stipulated in it, and expects Malaysia to do so, The Straits Times reported today.
Quoting Foreign Minister Vivian Balakrishnan in Parliament today, the report said the 1962 deal is not an ordinary agreement.
“The 1962 Water Agreement was guaranteed by both Singapore and Malaysia in the 1965 Separation Agreement, which in turn was registered with the United Nations,” he said.
“Any breach of the agreement would call into question the Separation Agreement, which is the basis for Singapore’s very existence as an independent sovereign state.”
Balakrishnan noted that previous foreign ministers had stated Singapore’s position on this issue comprehensively – Professor S. Jayakumar in 2003 and K. Shanmugam in 2014.
“As was stated then, the core issue is not how much we pay, but how any price revision is decided upon,” said Balakrishnan.
“Neither Malaysia nor Singapore can unilaterally change the terms of this agreement between our countries.”
According to the news report, it costs Singapore RM2.40 to treat every 1,000 gallons of water.
By selling it to Malaysia at 50 sen, Singapore is providing a subsidy of RM1.90 per 1,000 gallons.
Having bought treated water, Johor then sells it to its people at RM3.95 per 1,000 gallons, earning a profit of RM3.45 per 1,000 gallons, or RM46 million a year, said the report.
Malaysia’s Prime Minister Tun Dr. Mahathir had last month reportedly criticised the 1962 deal as too costly and possibly seeking to renegotiate the agreement.
Johor Mentri Besar Datuk Osman Sapian said the new price is likely to be the same as the raw water price set for the Melaka government, which is 50 sen for every 1,000 gallons.
According to the agreement between the countries that expires in 2061, Malaysia supplies Singapore with 250 million gallons of raw water daily at 3 sen per 1,000 gallons.
Malaysia then re-purchases a portion of the supply that had been treated at 50 sen per 1,000 gallons. — Bernama