Photo of Lee Hsien Loong and Mahathir Mohamad from Google

According to past annual reports posted by the Singapore’s Public Utility Board (PUB), the Singapore government profited more than S$1 billion in 8 years for selling Malaysia’s water to Singaporeans and Malaysia. In 2016 alone, the PUB posted S$166 million in profits.

A propaganda pamphlet by the Singapore Ministry of Foreign Affairs also revealed that the cost of treated water is $0.81/thousand gallon, bought from Malaysia at 3 sen (S$0.01) – a 1962 fix pricing kept unchanged from inflation. However when the same treated water was delivered to Singapore households, Singaporeans ended up paying 12.8 times more, at $10.37/thousand gallon come July 2018.

Both Singapore residents and the Malaysia government are victims of the money-obsessed Singapore government. Everyday the Singapore government made S$4.11 million from Singapore residents, selling 430 million gallon each day.

On the Malaysia’s front, the Singapore PAP government made S$2,707 (RM8,000) selling 16 million gallon each day. In exchange, Malaysia gets $2,538.16 (RM7,500), selling 250 million gallon a day – making a marginal loss of 6.6%.

Malaysia can however easily tilt the balance back into their favour.

Raise water prices by just 10%

If Malaysia’s Mahathir Mohamad gets to increase his 3 sen/thousand gallon sell rate, the Malaysia government will go into a profit as water treatment costs in Singapore would remain the same.

Calculating based off the above factors, Malaysia needs only to raise their raw water prices by 10%, and sell it at 3.3 sen/thousand gallons to stop making a loss from buying treated water in Singapore:

Graphics by STR

For example, if Malaysia sells at just 10% higher at 3.3 sen/thousand gallon, Malaysia will start getting a revenue of S$3,375.75 (RM9,975) a day – making a profit of 14.98%.

In their argument for cheap 3 sen/thousand gallon raw water price, the Singapore government has always complained about supplying 50 sen/thousand gallons of treated water to Malaysia. Raising cost of raw water will cost Singapore more than the price of treated water.

There are a buffet of reasons to raise water prices, from self-sufficiency in Johor to imposing “water awareness” for Singapore. In recent years, the Johor’s Linggui Reservoir – where Singapore’s PUB draw water from – has seen it’s record low of 20% as of Oct 2016. With a lower supply, common market principles like raising prices of a rare commodity would naturally apply. The Malaysia government after all have to prioritise it’s local citizens over foreign nationals in Singapore.

The Singapore government is the richest government in the world, with Prime Minister Lee Hsien Loong drawing the world’s highest salaries at S$2.2 million a year. However, the rich country made it’s wealth from cheap labour and cheap resources from neighbouring countries like Malaysia. Paying a higher raw water price would not make a dent on PUB’s billion-dollar profit, but it would sting the heart of PM Lee Hsien Loong like any rich miser.