Subsidy on Treated Water Supplied to Malaysia

Mr Png Eng Huat asked the Minister for the Environment and Water Resources (a) whether the Government tracks the amount of subsidies given to Malaysia for the supply of treated water every year; and (b) if so, what is the estimated amount of subsidies given to Malaysia since the Government started such tracking.

Under the 1962 Water Agreement, Johor is entitled to buy treated water of up to two percent of the total quantity of water we import to Singapore on any given day, or about five million gallons of water per day based on the 250 million gallons of water we draw from the Johor River per day. The treated water is sold to Johor and at the stipulated price of 50 Malaysian sens per thousand gallons. Both Singapore and Malaysia must comply fully with the 1962 Water Agreement and neither can unilaterally change the terms of the Agreement, including the prices of raw and treated water.

As the Member has rightly pointed out, we are subsidising treated water sold to Malaysia. The treated water price of 50 Malaysian sens per thousand gallons is only a fraction of the cost to Singapore of treating water at the Johor River Waterworks and supplying it to Malaysia, which was Malaysian Ringgit 2.40 per thousand gallons in 1997. The exact subsidies have varied over time as our cost has increased over the past 20 years due to factors such as the higher cost of materials and energy. We are, however, unable to share the amount of subsidies that have been provided over time.

At Malaysia's request, Singapore has been regularly supplying Johor with 16 million gallons per day, and up to 22 million gallons per day at times, of treated water. This is beyond Johor's entitlement of five million gallons of water per day under the 1962 Water Agreement. All treated water supplied to Johor is sold at the same price of 50 Malaysian sens per thousand gallons, without prejudice to our rights under the 1962 Water Agreement. We do so out of goodwill and in the spirit of good neighbourliness.