Prime Minister Tun Dr Mahathir Mohamad recently cited that Malaysia will be negotiating with Singapore to pay a more realistic water price with regard to current economic conditions.

In the current situation, the Malaysian prime minister noted Singapore’s water payment of 3 sen per 1,000 gallons (3,785l) is no longer viable.

Malaysia will continue to urge Singapore to pay for a ‘more realistic’ price for water according to the current economic costs.

Dr Mahathir shared that a group of the Johor government led by Foreign Minister Saifuddin Abdullah will head the re-negotiation with Singapore regarding what they deemed an unreasonable water price.

He stressed that it is unreasonable that the water price rate never increased and has been fixed since 1926 or for less than a century already.

He added that with 1 sen during that time anyone could buy things.

In an earlier report, sometime in August 2018, Malaysia’s Prime Minister Mahathir Mohamad has started the call to Singapore to review the existing price of raw water supply.

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He said increasing the price to 10 times more is acceptable to reflect today’s higher cost of living.

Based on the existing water agreement between the two countries, which will end in 2061, Singapore takes 250 million gallons daily (mgd) of raw water from the Johor River while Singapore provides Johor with 5mgd of treated water in return.

For over nine decades, Singapore is only paying 3 sen (1 Singapore cent) per 1,000 gallons of raw water.

When the treated water is sold to Malaysia, Singapore sells it at 50 sen per 1,000 gallons. The latter noted the increased selling price of treated is heavily subsidised and way too low for the water treatment cost.

When given the opportunity to review the water price in 1987, Malaysia declined. Talks to increase water price began to arise when Tun Mahathir, then Prime Minister, made an inquiry on the issue in 1998. However, the discussion did not flourish.

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In a previous interview with Dr Mahathir, he noted Johor’s selling raw water to Melaka at 30 sen per 1,000 gallons was a “charitable” act.

He added when selling to a foreign neighboring country, we need to earn more than that.

In July 2018, Singapore’s Ministry of Foreign Affairs (MFA) noted that Malaysia’s inability to act on the situation at the proper time lost its right for a price water review as stipulated in the 1962 Water Agreement in 1987.

The statement came in an interview with Malaysian Foreign Minister Saifuddin Abdullah stressing “the agreement says the content of the agreement can be reviewed after 25 years.”

In July 2018, the MFA noted Singapore’s position was set out in Foreign Minister Vivian Balakrishnan’s remarks in the Parliament.

Balakrishnan cited Dr Mohamad refused in 2002 to ask for a water pact review when it was due, thinking any changes to the price will impact the treated water’s cost sold by Singapore to Malaysia.