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'No formal request from KL' for S'pore to review water price

Publication Date : 07-03-2014


Malaysia has no right to review the price of water unilaterally, and the Malaysian government understands this, Singapore's Foreign Minister K. Shanmugam said yesterday.

He added that Singapore had not received any formal request from the Malaysian government to review the price, despite media reports from Johor of a possible proposal by the Johor authorities to raise the price of the raw water it sells to Singapore.

He was responding to Ellen Lee (Sembawang GRC), who had asked if Malaysia could raise the price of raw water sold to Singapore before the Water Agreement expires in 2061.

Her question was prompted by Malaysian media reports of a possible proposal by the Johor government for a water price review.

Shanmugam, who is also the law minister, noted that neither country could unilaterally change the water price, just as neither could alter the terms of the 1962 agreement. He said: "This is no ordinary agreement. It was guaranteed by both governments in the Separation Agreement in 1965, which was registered with the United Nations.

"Both countries have to honour the Water Agreement and the guarantee in the Separation Agreement. Any breach of the Water Agreement would also be a breach of the Separation Agreement and of international law."

The Water Agreement provided for a review after 25 years. Specifically, there was a right to review the price of water jointly in 1987. But Shanmugam said Malaysia "consciously chose not to review the price" in 1987 as it benefited greatly from the pricing then in place.

Johor buys 16 million gallons a day of treated water back from Singapore at 50 Malaysian sen (US$0.15) per 1,000 gallons, a fraction of the true cost to Singapore for treating the water and building and maintaining purification plants.

Malaysian leaders have acknowledged this benefit and "explained that indeed that was why Malaysia made a carefully considered decision not to review the water price in 1987", he said.

He referred to then Malaysian Prime Minister Mahathir Mohamad, who said in 2002 that Malaysia had not reviewed the water price in 1987 as it thought Singapore would in turn review the price of treated water it sells back to Johor Baru.

In the same year, then Johor State Assembly Speaker Zainal Abidin Mohamed Zin said the Johor government was right to not press for a review. He noted then that "Johor was dependent on Singapore for its treated water supply, and Singapore would have also increased its price of treated water sold to Johor".

Shanmugam told Parliament yesterday that when Malaysia did not opt to review the price in 1987, "Singapore then took several actions, which also benefited Malaysia".

One was to build Linggiu dam in 1990 at a cost of more than S$300 million ($237 million). This has raised the yield of the Johor River and has enabled both Johor and Singapore to draw water from it during the current dry season, he said.

The Malaysian government understands Singapore's position, he added, welcoming its foreign minister's comments last month.

Malaysian Foreign Minister Anifah Aman said then: "An agreement is an agreement. When there is an agreement, we will honour the agreement. If there is any need for review, we will forward it and if their response is positive, we will start talking."

Shanmugam told the House: "It reaffirms the position Malaysia has taken previously on honouring the agreement - and indeed that cannot be in any doubt - and acknowledges that a review of the water price is possible only if Singapore agrees to such a review."

He also told Lee it was premature to speculate on the impact of the possible proposal by the Johor government to review the water price, given that there have been no official approaches from Malaysia.


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