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Malaysian government adviser says Singapore may be trying to stall for time on water dispute

Daim suspects Singapore's negotiations will delay a raw water price increase until it becomes fully self-sufficient in producing potable water.

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Malaysia’s senior government advisor Daim Zainuddin commends Singapore’s willingness to hold talks with Malaysia regarding the contentious water issue but warns that Singapore may be employing delaying tactics as the small island nation prepares to become self-sufficient when it comes to potable water.

When interviewed by South China Morning Post (SCMP) in early May, Daim had said that the Singaporean officials he had met during the ninth annual bilateral leaders retreat on April 9 had been positive about resolving the disagreements.

“In the end I said, we are neighbours. We can’t change our geographic location. We have to be together, and we are intertwined. There is nothing we can do but sit down and discuss so that both can benefit.”

Daim chairs Malaysia’s Council of Eminent Persons and is a close friend of the country’s prime minister Dr Mahathir Mohammad. During the Mahathir’s first term (1981 to 2003), Daim had already served as finance minister.

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As the point person for negotiations with Singapore during those years, Daim cultivated strong ties with Singapore’s founding PM Lee Kuan Yew who is the father of current PM Lee Hsien Loong.

Even today, Daim enjoys a good relationship with both PM Lee and his wife, and wealth fund Temasek chief executive officer Ho Ching.

Daim describes Singapore’s agreeing to broach the topic of the water issue anew as a “major achievement.” The binding water agreement between Singapore and Malaysia is the 1962 Johor River Water Agreement that is valid until 2061. This agreement allows Singapore to get 250 million gallons of water every day from the Johor River at 3 sen per 1,000 gallons. Singapore sells treated water back to Johor at 50 sen per thousand gallons.

Malaysia had had an opportunity to review the price of raw and treated water when the pact reached its 25-year mark in 1986 and 1987, but the country’s leaders had declined to do so.

Singapore claims that since Malaysia had chosen not to review the water price at the 25-year mark, it had lost its chance to do so. Conversely, Malaysia feels that it still has the legal right to review the price of water at any time after the 25th year.

Daim said, “If you look at the agreement, it says that Johor has the right to review the price of water sold to Singapore after 25 years. It does not say that a review can happen only in the 25th year.

Malaysia has some good legal grounds, and hopefully, our attorney general will be able to convince the Singapore side”.

For many Singaporeans, the water issue goes deeper than the money exchanged between the two nations and is more an issue of sovereignty, as explained by Singapore’s former PM Goh in April 2002, “Any breach of the Water Agreements would also call into question the Separation Agreement, and undermine our very existence.”

Goh had been referring to the Independence of Singapore Agreement (also known as the Separation Agreement) signed between Singapore and Malaysia on August 9, 1965. This guaranteed the water agreements from 1961 and 1962, and registered it with the United Nations.

But Daim feels otherwise:

“The 1962 agreement expires in 2061. We believe by then Singapore would be self-sufficient as far as water demands are concerned and would no longer need to purchase raw water from Malaysia. So maybe Singapore is trying to stretch the dispute till such a time when it can tear up the agreement without any loss.”

He also underscores why a review of the prices must be done.

“Imagine this – Singapore pays a mere 7,500 ringgit [US$1,806] for its daily supply of 250 million gallons of water from Johor. In Singapore dollars, that’s about S$2,500. On the flip side, Johor has to pay 50 sen per 1,000 gallons of treated water from Singapore. That’s almost a 1,570 percent profit,” he said./TISG

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