Malaysia moves to secure Johor’s water future as data centres and industrial growth strain supply

MALAYSIA: Malaysia’s government is stepping up efforts to future-proof Johor’s water supply, with Deputy Prime Minister Datuk Seri Fadillah Yusof outlining a multi-pronged strategy that includes new dams, riverbank water storage schemes, barrages, raw water transfer infrastructure, and expanded water treatment capacity.

The move comes as Johor faces rapidly rising water demand driven by industrial expansion, urban development, and a surge in major investments, particularly data centres, which have established the state as one of Southeast Asia’s fastest-growing digital infrastructure hubs.

Current demand and the infrastructure response

Speaking in the Dewan Rakyat, Fadillah said the National Water Services Commission (Span) estimates Johor’s current raw water abstraction at 2,052 million litres per day (MLD). This figure is expected to climb significantly as industrial activity intensifies.

To address this, the government and Johor’s state water operator are assessing the need to progressively expand the capacity of water supply systems and treatment plants, based on current and projected future demand, as reported by The New Straits Times (NST). Four water treatment plant development projects, financed by Pengurusan Aset Air Berhad, are also currently being implemented to strengthen treated water supply capacity across the state.

Reclaimed water as a long-term solution

Beyond expanding raw water sources, Fadillah highlighted reclaimed water as a key component of the government’s long-term water security plans, particularly for industries with high water consumption like data centres.

He pointed to an existing collaboration between Indah Water Konsortium and Johor Special Water as an early example of this approach in action. The partnership currently supplies around 12 MLD of high-quality reclaimed water for use in data centre cooling systems in Johor, reducing the draw on treated water sources while making more sustainable use of existing resources.

“This initiative shows that alternative water resources can support industrial growth without compromising water supply for the public,” Fadillah said, as quoted by NST.

Why this matters for Singapore

Water has always been a sensitive subject in the Singapore-Malaysia relationship, and Johor’s water future is not purely a domestic Malaysian concern. As the JS-SEZ improves economic integration between Johor and Singapore, and as data centre and industrial investments increase on both sides of the Causeway, the long-term sustainability of Johor’s water supply becomes a problem for both regions.

The emphasis on reclaimed water for industrial use is also significant. If data centres and heavy industry in Johor can be weaned off treated water supplies through reclaimed water systems, it reduces pressure on the same raw water sources that underpin broader supply arrangements in the region, which is a development that benefits everyone with a stake in Johor’s continued growth as an industrial and digital hub.

For investors and businesses eyeing the JS-SEZ, the government’s proactive stance on water infrastructure will also serve as a signal that Malaysia is taking the long view on the sustainability of Johor’s development, rather than allowing infrastructure constraints to become a ceiling on the state’s ambitions.

Read also: Johor’s RM260 billion economic blueprint: What JETP means for the state and for Singapore