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Malaysia is not backing down in their attempts to raise water prices for Singapore

It should come as no surprise to anyone that the Malaysian government is pushing to revisit the water price issue with Singapore. Malaysian Deputy Foreign Minister Marzuki Yahya told parliament on Wednesday that the Malaysian Federal Government will attempt to restart negotiations with Singapore. Again.

“The government is very committed and remains firm on its stance regarding the water issue and we will not admit defeat,” said Mr Marzuki. He indicated that Prime Minister Dr Mahathir Mohamad will be headed to Singapore next week for ASEAN meetings where the topic of water price might be discussed.

Earlier this year, the 93-year old Dr Mahathir described the current price of water that Malaysia sells to Singapore at 3 sen per 1,000 gallons ‘ridiculous’. He also said that he would like to raise that by at least 10 times.

Currently under the 1962 Water Agreement, Singapore is allowed to draw 250 million gallons of raw water per day from the Johor River at a rate of 3 sen per 1,000 gallons. In return, Johor is entitled to receive up to 5 million gallons of treated water from Singapore at 50 sen per 1,000 gallons.

Clearly, Singapore will do all it can to prevent a hike in water prices before the end of the 100-year agreement in 2061. Singapore insists that Malaysia has missed its opportunity to negotiate for an increase back in the late 80s and demands that Malaysia respect the current agreement. PM Lee has said that the agreement is ‘sacrosanct’ and both parties should proceed in strict accordance to its terms.

But of course, Malaysia disagrees with Singapore’s contention that it lost its right to a price review, insisting instead that based on the agreement, Malaysia retains the right to review the water price.

So the question is whether or not Malaysia is entitled to review the prices at this point. On the one hand, Singapore is insisting that both countries had a chance to review the price of the 1962 agreement after 25 years, which was back in 1987. Singapore believes that once that moment passed, it means the right has lapsed and Malaysia can no longer demand for a review.

On the other hand, Malaysia believes that the wording of the agreement provides for the chance to review the not only at the 25 year mark but any time after 25 years – meaning the right doesn’t lapse and in fact is available until the end of the agreement. (I’ve not been able to find a copy of the agreement online, so I can’t tell which party I think might be more accurate in their interpretation)

Singapore Foreign Affairs Minister Dr Vivian Balakrishnan has also raised the point that the 1962 water agreement is protected under the 1965 Separation Agreement between Malaysia and Singapore. So a breach of the water agreement will call into question the separation agreement which “is the basis for Singapore's very existence as an independent sovereign state”. He added that “neither Malaysia nor Singapore can unilaterally change the terms of this agreement between our two countries.” It’s certainly a fair point and one worth considering of either country decides to bring this dispute to arbitration, which is a likely scenario at this point.

If that wasn’t serious enough, Pakatan Harapan lawmaker Hassan Abdul Karim voiced his concern that if the two neighbouring countries are unable to resolve this issue amicably, it could result in a war over water, specifically if Putrajaya decides to turn off the water supply.

This alarmist concern was quashed by Mr Marzuki, however, who assured Mr Hassan that Malaysia and Singapore still maintain good ties and would choose to settle this dispute via diplomacy over military action.