Heated talks on the water price review between Malaysia and Singapore is continuing with Attorney-Generals of both countries seeking a resolution.
Malaysian analysts are fully aware that it’s a difficult task for their country to negotiate as the water price was stipulated in the 1962 Water Agreement but it is urging Singapore to increase the water price to a reasonable amount despite the fact that the existing agreement is set until 2061.
It can only be modified if a revision is agreed to by both parties.
Currently, Singapore pays 3 sen per 1,000 gallons of raw water. When the water is treated, it is being sold to Johor at 50 sen per 1,000 gallons. Reportedly, Johor only gets a subsidy of about 2% or 5 million gallons per day (mgd) of the treated water from Singapore.
Azmi Hassan, a geostrategist and former lecturer at Universiti Teknologi Malaysia, noted the ongoing talks are a good start. Initially, Singapore was very reluctant to deviate from the original water rates.
Hassan added having the two Attorneys-General meet was a positive sign.
He cited Malaysia had to be cautious on Singapore’s argument to respect and strictly follow the water agreement no matter what, which gives Singapore a clear advantage.
In an earlier interview, Azmi said it is better if both countries’ senior officials initiate the discussions as Malaysia’s argument stays that the current water price rate is ‘illogical’ from a commercial sense.
Datuk Saifuddin Abdullah, Malaysian foreign minister, recently confirmed that negotiations on the water price review for both parties began last month. Talks were held between Malaysian Attorney-General Tommy Thomas and Lucien Wong, his Singaporean counterpart.
Reopening of the water issue
In mid-2018, the water agreement issue was highlighted when Malaysian Prime Minister Dr Mahathir Mohammad was re-elected during the 14th General Election in May 2018.
Dr Mahathir lambasted the existing raw water price being supplied to Singapore. He stressed it “did not make sense” and he is willing to negotiate the terms of the old agreement.
The water agreement is expected to end 42 years from now. This means Singapore enjoys the full rights to get 250mgd of raw water from Sungai Johor without any restrictions at a very low cost.
The university lecturer noted Singapore has the capacity to pay a higher water price rate. He agreed with Dr Mahathir’s position that the existing rate is both unfeasible and illogical.
Prof Dr Ahmad Atory Hussain of the Universiti Sains Malaysia said it was timely that Kuala Lumpur takes action on the issue and seeks a review.
But Dr Mohd Kamarulnizam Abdullah of the Universiti Utara Malaysia Department of International Affairs feels Singapore will most likely agree to a revision only after the contract ends in 2061.
Dr Mohd said Singapore might be using a delaying tactic before making a final decision. Another strategy is to make things difficult for Malaysia or it may say that Kuala Lumpur is making unacceptable demands.
He added that even if Malaysia convinces the city-state about their plea, the price change would likely be only a minimal amount.