Singapore Should Revise Water Deal or Risk Crisis, Malaysia Says

Yudith Ho

(Bloomberg) -- Malaysia renewed its call for neighboring Singapore to be more open to revising a water supply agreement inked in 1962 or suffer shortages as reserves shrink.

The water reserve margin in the southern state of Johor, which supplies raw water to Singapore, has dropped to 4% and will reach zero by the third quarter of 2020 if nothing is done to mitigate the decline, Xavier Jayakumar, Malaysia’s minister of water, land and natural resources, said in response to questions in parliament Tuesday.

Bringing that level up to the recommended minimum of 10% requires large investment, Xavier said. In the event of a water crisis, Malaysia will put the needs of people in Johor over those in Singapore, he said.

In April, leaders of the two countries promised to reach a friendly resolution to the long-running water spat. Singapore relies on its neighbor for nearly half of its water needs through agreements that date back to as early as 1927. Malaysia now wants to revise the prices set out in the remaining 1962 accord, which gives Singapore 250 million gallons of raw water daily at 3 sen per 1,000 gallons, with Malaysia buying back a portion of treated water at 50 sen (12 cents) per 1,000 gallons.

To contact the reporter on this story: Yudith Ho in Kuala Lumpur at yho35@bloomberg.net

To contact the editors responsible for this story: Stephanie Phang at sphang@bloomberg.net, Chan Tien Hin

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