For more than half a century, island-state Singapore has been getting half its fresh water from northern neighbor Malaysia — a deal that could be up for review as the new prime minister in Kuala Lumpur seeks to cut down on the country’s ballooning debt.
Singapore was once part of Malaysia, but they separated acrimoniously in 1965, clouding diplomatic and economic dealings for years. Relations remain volatile.
In his first few weeks back in office, Malaysian Prime Minister Mahathir Mohamad has put the brakes on projects and cut ministers’ salaries to tackle about 1 trillion ringgit (US$248.72 billion) of national debt that he blames on past corruption.
Photo: Reuters
Now, he has his guns trained on the price of water sold to Singapore.
“I think it is manifestly ridiculous,” Mahathir said in an interview with Channel NewsAsia published on Monday, referring to the water deal.
“That was okay way back in the 1990s or 1930s,” he added, saying that he wanted to renegotiate the terms.
Tensions between Singapore and Malaysia were high during Mahathir’s previous tenure from 1981 to 2003, and the water row contributed to the difficult ties.
Since returning to power in May, the 92-year-old has said he would halt a high-speed rail project linking Kuala Lumpur with Singapore, and would develop some offshore rocks that were the subject of a territorial dispute.
Some analysts say Mahathir’s revival of the water dispute could be posturing.
“It is not just about money. He [Mahathir] is a very canny statesman,” said Nicholas Fang, director of security and global affairs at think tank the Singapore Institute of International Affairs. “He knows how to put into place different levers that he can then pull to affect certain things.”
Under a deal penned in 1962, Singapore can import up to 250 million gallons of water from the Johor River every day from Malaysia — about 58 percent of its current daily water needs — at a cost of 0.03 ringgit per 1,000 gallons. It is obliged to sell a small portion of treated water back to Malaysia at preferential rates.
If fully drawn, that imported water would cost Singapore about 2.7 million ringgit annually.
The water agreement was guaranteed by both governments when they separated in 1965, and Singapore has said it equates the sanctity of the deal with its survival as a city-state.
“Every other policy had to bend at the knees for our water survival,” Singapore’s founder Lee Kuan Yew (李光耀) once said.
Lee died in 2015 and his son, Lee Hsien Loong (李顯龍), is the Singaporean prime minister.
Singapore has been building up its domestic water sources — which include rain catchment and desalination — and pushing water recycling initiatives to become more self-reliant by the time the 2061 deal expires.
However, the resurgence of the water dispute with Malaysia comes at an awkward time for the city-state.
Hyflux, a private company that has built desalination plants supplying up to one-quarter of Singapore’s water, is in dire financial straits. To keep creditors at bay, it is looking to sell its Tuaspring plant in the west of the city-state.
Singapore’s national water agency PUB said it is “monitoring developments closely, and there are measures in place to keep the Tuaspring plant in continued operation.”
Water prices have become a spiky issue in Singapore, which is due to hold elections by early 2021. A price hike last year — the first in nearly two decades — led to a rare public protest against a government that enjoys strong popular support.
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