In early November, Malaysia renewed its call on Singapore to cooperate in revising a 1962 water supply agreement. According to Malaysian Minister of Natural Resources Xavier Jayakumar, the margin of water reserves in the state of Johor has fallen to four percent and could reach zero by 2020. The recommended margin is ten percent. Under the 1962 water agreement, Singapore is allowed to extract 250 million gallons (946 million liters) per day from the Johor River. Singapore pays three sen ($0.01) per thousand gallons (3785 liters) of raw water and sells treated water to Malaysia for 50 sen ($0.18) per thousand gallons. The agreement expires in 2061. The 1. On September 27, 1961, the Malaya Federation signed an agreement that caused Singapore to lose the right to draw up to 86 million imperial gallons (390,000 m3) of water per day from the Tebrau River, Skudai River, Pontian Reservoir and De Pulai Reservoir, with effect until 2011. On September 29, 1962, another agreement was signed, granting Singapore the right to draw up to 250 million imperial gallons (1,100,000 m3) per day from the Johor River with effect until 2061. Both agreements provided for the price of 3 Malaysian cents for 1,000 imperial gallons (4,500 L). Saifuddin said Malaysia is working on several water projects in Johor, which the government hopes will make the state completely self-sufficient when it comes to treated water.

Singapore said this price was heavily subsidized and lower than the cost of water treatment. Singapore provided 16 mgd of treated water in practice at Johor`s request. A revised selling price of the raw water will be finalized by the relevant authorities and is expected to be offered soon in Singapore, Malaysian Foreign Minister Saifuddin Abdullah told the Nikkei Asian Review in an interview. “We know it will be difficult,” he said, adding that talks between the two sides on alternatives to a price revision had not progressed. Singapore and Malaysia have a long-standing conflict over water supply. Osman`s comments came a day after Prime Minister Mahathir Mohamad called on Johorans to comment on the “morally wrong” water deal between Malaysia and Singapore. From 1998 to 2003, Singapore and Malaysia entered a period of difficult negotiations on a number of issues, including the price of water. A brief description of the negotiations can be found in a statement by Foreign Minister S. Jayakumar, in Parliament on 23 January 2003 and in this publication. For Malaysia, there are several reasons for its position on the water agreement. The country`s debt has become more manageable this year, but remains high. The Malaysian government hopes to increase its revenues by renegotiating the terms of the deal and increasing the price of water sold to Singapore (it is likely that Singapore will increase the price of treated water in this case).

Singapore`s position has repeatedly been that Malaysia has lost its right to review the price of water under the 1962 Water Agreement. Neither Malaysia nor Singapore can unilaterally change the prices of raw water and recused water set out in the water agreements. Under the water agreements, Singapore pays Johor 3 Sen per thousand gallons of raw water and Johor pays Singapore 50 Sen per thousand gallons of treated water. 50 Sen represents only a fraction of the actual cost to Singapore for water treatment, including the construction and maintenance of the entire infrastructure of water treatment plants. .