Malaysian PM Dr Mahathir Mohamad said, “We are of the view that the price of 3 sen for 1,000 gallons of raw water was decided in 1926. At that time, the value of 1 sen could buy a lot of goods, but now with 1 sen we can’t buy anything, even with 3 sens we can’t buy anything.”
He made these comments to the press after he launched the National Community Policy in Puchong.
He added, “By right, price of goods should be current. Today we are not talking about millionaires, but billionaires because income has increased tremendously. So, if you think that the price set in 1926 still remains until the year 3000 — another millennium — is it reasonable? I feel it is unreasonable. Until when?”
The price of water between Malaysia and Singapore has been a bone of contention for many years now.
An agreement on this issue that was signed in 1961, expired in 2011, a subsequent agreement signed in 1962 will be expiring in 2061.
Malaysia guaranteed these pacts under the Separation Agreement, which confirmed Singapore’s sovereignty in 1965.
Malaysian Prime Minister Mahathir Mohamad said on Sunday (Feb 17) that the official talks concerning the price of raw water between Singapore and Malaysia will be conducted by Foreign Minister Saifuddin Abdullah.
The location and schedule for the discussion have not yet been disclosed.
During the Financial Crisis in Asia, Singapore and Malaysia commenced negotiations on the water issue which lasted for 6 years and was later halted by Malaysia.
However, when Mahathir was elected Prime Minister last year the issue resurfaced. Mahathir said that the price of the raw water was “manifestly ridiculous.”
He also announced that Malaysia would pursue a renegotiation of the terms of the previous agreement, which states that Singapore can receive up to 250 million gallons a day of raw water from the Johor river.
Singapore pays Malaysia 3 sen price for every 1,000 gallons of raw water and then resells treated water to Johor at 50 sen for every 1,000 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.
The Malaysian Prime Minister talked to Singapore’s Prime Minister, Lee Hsien Loong, last November, wherein the leaders of the two countries were able to air out their differing perspectives about the “right to review the price of water under the 1962 Water Agreement,” but also said they were both willing to proceed with officials from both countries talking about the matter, to “better understand each other’s positions”.
Dr. Vivian Balakrishnan, the Foreign Affairs Minister of Singapore, said in Parliament that the Prime Ministers of both countries have agreed for their respective Attorneys-General to talk about if Malaysia has the right to negotiate the 1962 Water Agreement water prices.
He said, “The Attorneys-General subsequently met in December 2018. Unfortunately, their discussions were overshadowed by the new issues that had arisen over the Johor Baru port limits and the Seletar ILS (Instrument Landing System) procedures.
But the two Attorneys-General will meet again to continue their discussions.”
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