Putrajaya—It seems as though the price of water is a recurrent theme with Malaysia’s Prime Minister Dr Tun Mahathir Mohamad since he brought it up yet again on February 28.
At the Johor government retreat in Putrajaya, Dr Mahathir had choice things to say about the price of water, rich and poor countries, and the unfairness of water prices.
According to Dr Mahathir, it was not reasonable for a wealthy nation such as Singapore to buy water from Malaysia for what was him is a low price of 3 sen for every 1,000 gallons.
Malaysia’s Prime Minister said this: “We need to fight for this. A rich country (Singapore) (cannot be) buying water from poor countries at such an unreasonable price.”
He last brought up the water issue a mere eleven days prior to his speech at the Johor retreat, on February 17th. He called the water agreement between Singapore and Malaysia “unreasonable” when he was at Puchong, Selangor.
This time, Dr Mahathir made suggestions concerning Johor competing with Singapore’s ports, saying that Singapore and Johor have “equally strategic” locations.
He said, “Johor has some advantages and Singapore has some advantages.” One advantage, he claimed, is that Johor is right next to the Republic, but that Johor failed to fully take advantage of this.
Last August, Dr Mahathir announced that he planned to raise the price of raw water Malaysia is selling to Singapore by as much as 1000 percent. For him, this is reflective of the cost of living from the time the agreement was drawn up almost six decades ago.
The 1962 Water Agreement between Singapore and Malaysia allows for the Republic to get 250 million gallons (946.3 million liters) of water every day from the Johor River at the price of 3 sen for every 1,000 gallons. This agreement is in effect until 2061.
Dr Mahathir likened the water situation to the palm oil plantation issues the country is facing, due to the greatly lowered price of palm oil. The British, he said, had had great success with this industry.
“Their set-up was of such a large scale that they could profit more,” Dr Mahathir explained, “But we may try to follow the way of the British (in managing farms) but small estates cannot emulate such wealth.”
Singapore sells treated water back to Johor at 50 sen per thousand gallons. The steep hike in the price of water is justified by the fact that Singapore pays for the water treatment infrastructural costs, dams and treatment plants, pumps and pipelines, including construction, operation, and maintenance costs of these, as explained in a booklet entitled Water Talks, which was put out in 2003.
For example, in one 2003 project Singapore paid S$1 billion, while Malaysia shouldered none of the costs.
According to the government, the real cost of treating the water is RM2.40 (S$ .80) per thousand gallons, which means that Singapore pays for RM1.90 (S$ .63) per thousand gallons.
Last July, Dr Vivian Balakrishnan, Singapore’s Foreign Affairs Minister, said in Parliament that the issue is not only about the price of water, but is also about sovereignty.
He said that neither Malaysia nor Singapore should make a unilateral decision to change the terms of the 1962 Water Agreement.
While Malaysia could have initiated a review of the Agreement back in 1987, the country refrained from doing so, since back then the pricing agreement was advantageous to them. A decade later, a negotiation was undergone after the Asian Financial Crisis in 1997. However, Malaysia later put a stop to the negotiations.
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