Chief Minister of Johor, Osman Sapian has chimed in on the Malaysia-Singapore water dispute.
Mr Sapian hinted that Malaysia plans to increase water prices in the future by 16 times — from 3 sen (S$0.01) to 50 sen (S$0.17) per thousand gallons.
Here’s why we think Malaysia’s latest move is pretty ridiculous and might potentially backfire.
According to the 1962 water agreement, Singapore is entitled to draw a maximum of 250 million gallons per day from the Johor River.
This means that Singapore might have to pay Malaysia up to RM 125,000 (S$42,134) on a daily basis.
That’s quite a lot to pay for water that would otherwise be flowing into the sea.
Singapore’s not the only country in the world that imports water.
Hong Kong (HK) imports majority of its water from the neighbouring Guangdong province.
On the surface, they are paying only 8 sen/1000 gallons (S$0.027/1000 gallon).
But that’s not it.
The price of water in HK’s case is inclusive of treatment and delivery costs.
Singapore, on the other hand, is already paying for all infrastructure-related expenses.
Singapore must provide Johor with treated water of up to 2% of the raw water that we receive, as stipulated in the 1962 water agreement.
In return, Johor pays 50 sen/1000 gallons for treated water from Singapore. This is approximately S$0.17/1000 gallons.
If Malaysia insists on raising raw water prices 16 times higher, then Singapore’s price for treated water would logically increase accordingly.
Let’s do the math.
If we were to take the new price of raw water proposed by the Malaysian minister, multiplied by a similar factor of 16, we would come up to an exorbitant amount as well.
S$0.17/1,000 gallons x 16 = S$2.72 per 1000 gallons.
Singapore sells Malaysia about 37 million gallons of treated water daily.
S$2.72/1000 gallons x 37,000,000 = S$100,640/day
Which amounts to charging Malaysia a whopping RM298,769.97/day, up from RM18,500/day.
Sounds about right.
Singapore will most probably match Malaysia’s price increase for raw water, after working out the costs of treating water.
So if Malaysia insists on pushing forward with this proposal, regular Malaysians will undoubtedly see an increase in their cost of their water bills as well.
The more important question is — how would they feel about paying more?
Featured image from MyKhilafah.
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