Raising Price Of Malaysian Water

by Patrick Liew on August 16, 2019

Raising Price Of Malaysian Water

Respondents to the above suggestion by Tun Mahathir and his administration can be broadly categorized into three major camps.

1. First, there are those who said Singapore should not be overly-dogmatic.

We should agree to the increase in price.

By doing that, we close one of the grievance files and improve our bilateral relationship with Malaysia.

On the other hand, if we agree to change the Water Agreements, would that not start a precedence with both Malaysia and other countries that we are open to change or even compromise our positions for other agreements?

In the past, Mahathir has threatened to bomb Singapore albeit in jest and to switch off the tap.

Will agreeing to change the Water Agreements make us look like we are bowing to Malaysia and subject ourselves to further demands and even threats?

2. The second camp comprises of people who treat the Water Agreements like a business deal.

If Singapore agrees to pay more for the Malaysian water, we should get something back in return.

For example, we should have the rights to sell treated water to Johor at a profit-making and not at a subsidized price.

Also, as part of the changes in the agreement, Johor has to purchase a fixed quota of water from us on a monthly basis and abide by other conditions.

After all, Singapore government has to be accountable to our people and ensure that we do not end up in deep and murky water and getting short end of the stick.

As background information, it may be important to note that Singapore has invested more than $1 billion on various water treatment infrastructure, including developing a dam to create the Linggiu Reservoir.

Currently, the costs for treating every thousand gallons of water is RM2.40.

By selling to Johor at 50 Sen, Singapore is subsidizing RM1.90 per thousand gallons of treated water.

According to Foreign Affairs Minister Vivian Balakrishnan, in a written parliamentary reply in 2017, Singapore has been supplying water to Johor in excess of its entitlement, and the supply of treated water amounted to 16 mgd.

Johore sells the treated water to Johoreans at RM3.95 per thousand gallons and as a result, it generates about RM46 million of profits per year.

The downsides for renegotiating the Water Agreements is that it may be a complicated and protracted process.

The process may also create more complicated or other disagreements.

3. The third camp of people believes that we should leave the agreements alone.

When the governments of Singapore and Malaysia signed the Independence of Singapore Agreement (also known as the Separation Agreement) on 9 August 1965, it guaranteed the 1961 and 1962 Water Agreements.

The guarantee was also enacted into the Malaysian Constitution by an Act of Parliament.

The Malaysian Constitution was annexed to the Separation Agreement.

The Separation Agreement was also registered with the United Nations.

The 1961 and 1962 Water Agreements provided for a price review after 25 years – in 1986 and 1987 respectively.

However, for reasons best known to Mahathir who was the Prime Minister then, he chose not to review the price.

Singapore has consistently maintained that both countries have to honour and adhere to the terms and conditions of the Water Agreements and the guarantee in the Separation Agreement.

The agreements cannot be unilaterally changed or terminated by Singapore or Malaysia.

Any breach of the Water Agreements would call into question the sanctity of the Water Agreements and the Separation Agreement.

More importantly, it can also undermine Singapore’s sovereignty and existence as a nation.

Thus far, Mahathir or any of his Minister has not officially notify the Singapore government about renegotiating the Water Agreements.

He could have re-enacted an old strategy from his playbook and raised this subject again to make Singapore a bogeyman.

By doing that, he hopes that it will unify his people and distract them from other major problems facing his administration.

Majathir may also be planning to use this issue as a potential bargaining chip to make changes to the water or other agreements.

Or hope that it will strengthen his position in negotiating future collaborations with Singapore.

Whatever the case, moving forward, it bodes well for both countries to stop throwing mud at one another.

We will both end up with muddy hands and with mud all over our economies and communities.

As we face a challenging global economy, why not integrate and synergize the two economies so as to collaborate and co-create solutions for mutual benefits.

Explore ways to enhance economic returns, advantage and growth.

Forge a stronger alliance to compete with other economies.

And focus on developing our common interests and strengthen bilateral and multilateral relations.








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