Malaysia’s Water Price Play: A Ten‑Fold Upscale?
In a move that could leave Singapore’s tap with a hefty new bill, Prime Minister Tun Dr Mahathir Mohamad has declared his intent to hike the raw water price it pays Singapore by more than ten times. The proposal comes amid rising living costs and a fresh review demanded once the long‑standing 1962 Water Agreement reaches its 2061 expiration.
How the Deal Reads (So Far)
- Singapore consumes up to 250 million gallons a day (mgd) of raw water from the Johor River.
- In return, Johor is entitled to 5 mgd of treated water from Singapore.
- Singapore pays 1 sen per 1,000 gallons of raw water, and the treated water heads back for 50 sen per 1,000 gallons.
- Currently, Singapore claims the 1 sen fee is heavily subsidised and undercuts the actual treatment cost.
Why the Price Re‑Think?
Dr Mahathir stated that Malaysia has never revisited the price terms since 1987—the last time the contract had an optional review clause. In the 1998 talks, the water deal didn’t crack anything new, leaving the issue on the back burner until now.
He also pointed out that Johor sells raw water to the neighbouring state of Malacca at only 30 sen per 1,000 gallons, labeling it “charitable.” For a foreign country, he said, “that’s simply not enough.”
Historical Context & Current Stance
With the 1962 Agreement’s 25‑year review trigger now past, Malaysia’s Foreign Minister Saifuddin Abdullah reminds that the contract allows for price reassessment, urging Singapore to engage in a fresh negotiation. Singapore’s Foreign Minister Vivian Balakrishnan has reiterated that Singapore keeps looking at the water deal with the same eye it had in 2002.
Even after the Pakatan Harapan coalition, the water issue popped up again. In July, Johor’s Menteri Besar Osman Sapian hinted at a price negotiation, while Datuk Saifuddin pledged to honour the agreement while re‑starting talks.
Takeaway
Will Singapore pour cash into new water barrels, or will the nations settle on a fresh water coupon? Time will make the tide clear.
