Malaysia has lost right to review price of water, says Singapore's MFA

Ministry of Foreign Affairs says S'pore has always been prepared to settle disputes via arbitration

Singapore has been clear and consistent in its position that Malaysia has lost the right to review the price of water under the 1962 Water Agreement, a spokesman for Singapore's Ministry of Foreign Affairs (MFA) has said.

No review of the price of water has taken place, the spokesman said yesterday in response to comments by Malaysian Foreign Minister Saifuddin Abdullah a day earlier.

Singapore has always been prepared to settle disputes via appropriate international third-party dispute settlement procedures, on mutually agreed terms, MFA added.

Mr Saifuddin, who spoke in the Malaysian Parliament on Tuesday, had disagreed with Singapore's position that Malaysia lost the right to review the water price after it chose not to do so in 1987.

Malaysia will seek international arbitration if Singapore refuses to negotiate the price of water, he added.

Among other things, Mr Saifuddin said Malaysia and Singapore agreed to discuss reviewing the agreement when Malaysian Prime Minister Mahathir Mohamad visited the Republic last November. He also claimed both countries were in the "second phase of discussion, looking at the price modality, the period and other related matters".

The Singapore MFA spokesman noted that when Prime Minister Lee Hsien Loong and Dr Mahathir met in Singapore on Nov 12 last year, both sides had expressed their differing views on the right to review the price of water under the 1962 agreement. They had expressed their willingness for officials to have further discussions to better understand each other's positions on this right, the spokesman added.

The attorneys-general from both countries subsequently met once last December to discuss the issue.

"However, their discussions did not make progress as they were overshadowed by the issues that had arisen over the Johor Baru port limits and the Seletar Instrument Landing System procedures," said the MFA spokesman, referring to ongoing disputes between Singapore and Malaysia over maritime boundaries and airspace.

Singapore's MFA made clear yesterday that "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 spokesman added.

Under the 1962 Water Agreement, which expires in 2061, Singapore can draw up to 250 million gallons (mgd) a day of raw water from Johor at three sen per 1,000 gallons.

Johor is entitled to buy up to five mgd of treated water from Singapore at 50 sen per 1,000 gallons, a price that is only a fraction of the true cost to Singapore of treating the water.

The MFA spokesman also noted what Mr Saifuddin said on Tuesday on international arbitration, and earlier comments by Dr Mahathir on March 3 that Singapore does not want to go to the "world court" over the price of water as it would lose.

The MFA spokesman said: "Singapore has always been prepared to settle disputes by recourse to appropriate international third-party dispute settlement procedures, on terms mutually agreed to by the parties.

"In fact, 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 spokesman added.