Malaysian Prime Minister Mahathir Mohamad said that while relations between his country and Singapore are good, he wants to renegotiate the terms of a water supply contract, in a recent interview.
“Relations with Singapore have been quite okay, because we cannot avoid the fact that it is our nearest neighbor. But there are certain issues that we need to settle,” Mahathir told Bloomberg Television’s Haslinda Amin on Friday.
Mahathir’s issue of choice? The price of water outlined in a decades-old agreement.
“Well, they’re still paying three sen for 1,000 gallons, and once the 1,000 gallons is filtered, we can buy back 12 percent of that. At the same time, they can sell 1,000 gallons for S$17,” said the 92-year-old leader. “That’s a lot of money.”
In a separate interview with Channel NewsAsia, the prime minister believes that it is “manifestly ridiculous” for Malaysia to sell water at that 3 sen per thousand gallons.
“That was okay way back in the 1990s or 1930s. But now what can you buy with 3 sen? Nothing.”
Tensions between the neighboring nations were high during Mahathir’s previous tenure from 1981 to 2003, and this particular water row had previously contributed to the difficult ties.
Since returning to power in May, the Malaysian PM has since halted a high-speed rail project linking KL to Singapore until further notice, and will develop some offshore rocks that were the subject of a territorial dispute.
Malaysia has, however, since dropped claims towards another disputed rock, Pedra Branca. We’ll give you that one, Singapore.
The water at the center of the debacle was established in 1962, and allows Singapore to draw 250 million gallons of raw water daily from the Johor River at 3 sen per 1,000 gallons. Once it is filtered in Singapore, Malaysia then buys back a portion of that at 50 sen (12 cents) per 1,000 gallons.
As Mahathir implied, he would like to see the price benefit Malaysians more, but according to a terse statement from Singapore’s Ministry of Foreign Affairs on Monday, that’s not likely to happen before the pact expires. And that won’t be until 2061.
That’s because the water pact is not your typical free-market deal. The 1962 accord is legally binding and contains provisions that make clear Malaysia cannot unilaterally raise the water price anytime it wants.
That’s because the water agreement is an official part of the treaty brokered by the United Nations when the two countries separated in 1965. Prior to that, Singapore was part of Malaysia, sharing resources and a common federal government.
But when Singapore was expelled from the Malaysian Federation, the treaty essentially meted out the separation of assets.
And it seems like the water agreement has been under dispute ever since. Minister of Foreign Affairs Vivian Balakrishnan simply posted a video that reminded Singaporeans about why water security is of utmost importance.
Both nations have a history spouting their side of the story, including placing full-page ads in regional newspapers for anyone who would read them. The verbal sparring got so tense at one point that the late Prime Minister Lee Kuan Yew said he was prepared to send troops to Malaysia if they tried to cut off the water supply.
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