Singapore says prepared to settle water spat through third-party procedure

Saifuddin said that Malaysia has given subsidies of up to RM2.4 billion — about RM42 million a year or RM100,000 a day — in selling raw water to Singapore since the 1962 water agreement took effect. — Picture by Mukriz Hazim
Saifuddin said that Malaysia has given subsidies of up to RM2.4 billion — about RM42 million a year or RM100,000 a day — in selling raw water to Singapore since the 1962 water agreement took effect. — Picture by Mukriz Hazim

KUALA LUMPUR, March 14 — A day after Malaysia’s foreign minister took a swipe at his Singaporean counterpart for “reckless” comments in an ongoing tit-for-tat over water prices, Singapore’s Ministry of Foreign Affairs (MFA) said that the country has always been prepared to resolve disputes through appropriate international third-party dispute-settlement procedures.

Malaysia’s Foreign Minister Saifuddin Abdullah said at a parliamentary sitting on Tuesday that the country would seek international arbitration if Singapore does not renegotiate the 1962 water agreement.

Earlier this month, Malaysian Prime Minister Tun Dr Mahathir Mohamad said that Singapore did not want to take the matter to the “world court” because it would lose.

Responding to media queries yesterday, a spokesperson for MFA said: “As far back as 2003, then-Minister for Foreign Affairs S. Jayakumar said that Singapore was prepared to agree to refer this matter to international arbitration by the Permanent Court of Arbitration in the interest of resolving the dispute.”

The MFA spokesperson reiterated that Singapore has been clear and consistent in its position that Malaysia has lost the right to review the price of water under the 1962 agreement.

The pact provided for a review after 25 years, which meant that there was a right to revise the price jointly in 1987.

Malaysia chose not to seek a review then because it acknowledged that it had benefited from the pricing arrangement.

The issue over water prices came to the fore last year after Dr Mahathir pilloried the price of raw water sold to Singapore as “manifestly ridiculous”.

During a meeting between Dr Mahathir and Singapore Prime Minister Lee Hsien Loong in November last year, the two sides expressed differing views on the right to review the water price under the 1962 agreement, MFA said.

“They expressed their willingness for officials to have further discussions to better understand each other’s positions on the right to review the price of water under the 1962 water agreement,” the MFA spokesperson added.

Singapore and Malaysia’s attorneys-general met in December last year, but did not make headway in discussions, as these were overshadowed by the ongoing disputes over airspace and maritime boundaries.

“There was certainly no agreement between the attorneys-general on any matter related to the 1962 water agreement during their meeting. The attorneys general will meet again to continue their discussions,” the spokesperson said.

On Tuesday, Saifuddin expressed shock at Singapore Foreign Affairs Minister Vivian Balakrishnan’s remarks on the matter and took issue with what he called the Singapore minister’s insinuation that Malaysia had a problem with its governance. "That is a malicious accusation. It is hitting below the belt," Mr Saifuddin said.

He added that Malaysia has given subsidies of up to RM2.4 billion— about RM42 million a year or RM100,000 a day — in selling raw water to Singapore since the agreement took effect.

In Parliament on March 1, Dr Balakrishnan had refuted Dr Mahathir’s comments, which painted Singapore as a “rich nation” paying its poorer neighbour an “unreasonable rate” for water.

Dr Balakrishnan added that Singapore honours its international agreements and commitments, and that he would leave it to Singaporeans to decide whether the country had been “fair” or “morally wrong” in the pricing of water.

About the water agreement

Singapore buys water from Malaysia under water agreements signed in 1961 and 1962. The first expired in 2011 and the second will expire in 2061.

The Malaysian government guaranteed the pacts in the Separation Agreement that established Singapore as a sovereign state in 1965.

The 1962 agreement, which will lapse in 2061, gives Singapore the right to buy 250 million gallons of water a day from the Johor River, at 3 sen for every 1,000 gallons.

In return, Johor is entitled to buy back a daily supply of treated water from Singapore, of up to 2 per cent of the raw water it supplied, at 50 sen for every 1,000 gallons.

Singapore has said that the cost of treatment is really RM2.40 for every 1,000 gallons, while Malaysia sells the treated water to Johor citizens at RM3.95 per 1,000 gallons.

Singapore has also supplied extra treated water to Johor state, at its request.

For example, between Jan 2 and 4 this year, Singapore supplied extra treated water to Johor when it needed more because its water plants experienced disruption due to pollution, Dr Balakrishnan told Parliament on March 1. — TODAY