Malaysia has lost right to review water price, says Singapore Minister – Bernama

When Malaysia decided not to review the water price under the Water Agreement in 1987, it lost its right to review the price, says Singapore Minister for Foreign Affairs K. Shanmugam.

"Singapore’s position is that Malaysia has lost its right to review the water price. The Water Agreement provided for the review after 25 years. Specifically, there was a right to review the price of water jointly in 1987.

"However, Malaysia consciously chose not to review the price. It had good reasons for this," he said this in reply to a Parliamentary question today.

Ellen Lee of Sembawang GRC, had asked the minister whether Malaysia had the right to review the price of raw water sold to Singapore under the bilateral water agreement at any time before its expiry in 2061.

Shanmugam said Singapore had stated its position on the issue and also conveyed it officially to the Malaysian Government on several occasions.

"Our position on this issue is well-known to Malaysia. We have stated this publicly, and also conveyed it to the Malaysian Government, including at the highest levels. The Malaysian Government understands the position," he said.

He quoted Malaysia's Foreign Minister Datuk Seri Anifah Aman as saying on February 17, this year:

“An agreement is an agreement. When there is an agreement, we will honour the agreement.

"If there is any need for review, we will forward it and if their response is positive, we will start talking."

Shanmugam said that had Malaysia exercised the right to review the water price in 1987, Singapore might then have made different investment decisions to develop the Johor River, for instance the Linggiu Dam project of 1990.

In the event, he said Malaysia chose not to review the water price in 1987, and on that basis, Singapore then took several actions, which also benefitted Malaysia.

He said this included building the Linggiu Dam at a cost of over S$300 million (RM773 million), which increased the yield of the Johor River and enabled both Johor and Singapore to draw water from it during the dry season.

Indeed, neither party can unilaterally change any of the terms of the 1962 Water Agreement.

Shanmugam said Malaysia benefitted greatly from the current pricing arrangement.

"We enjoy good relations with Malaysia at all levels. We will continue to work to enhance our cooperation and friendship with Malaysia, in order to benefit both our peoples," he added. – Bernama, March 6, 2014.