How Johor’s growing water woes could affect Singapore

JACKSON EWING and KARISSA DOMONDON Today Online 15 Sep 16;

Since its founding, Singapore has depended on water imports from neighbouring catchments in Johor, Malaysia, through agreements reached in 1961 and 1962.

Over time, Singapore improved its domestic catchment management, created more efficient water-use systems, and brought desalination capacity online. Meanwhile, Johor has transformed itself into a bustling hub second in many ways only to Malaysia’s capital region. These developments have created a new water calculus between Singapore and Malaysia.

Since early 2015, drought, pollution and large discharges to combat salinity have depleted water levels in Johor River dams to historic lows, forcing Johor to seek additional potable water supplies from Singapore on three occasions in 2015 and 2016 and to impose water rations for 
85,000 residents and industrial users in April this year .

This shock to the system is spurring a re-evaluation of cross-border water relations, and reveals Johor’s vulnerability to the resource impacts of its own development and the changing climate.

The status quo ties directly to the initial treaties. The 1961 agreement gave Singapore drawing rights of up to 391 million litres per day (mld) until 2011 from the Tebrau and Skudai Rivers in Johor. The 1962 agreement allows Singapore to draw up to 1,136mld from the Johor River until 2060 through the Linggiu Reservoir and the Johor River Water Works (JRWW).

Singapore is to pay RM0.03 (S$0.01) for every 1,000 gallons of water supplied under the two agreements.

The Linggiu Reservoir and the JRWW are located near Kota Tinggi in eastern Johor and are managed by Singapore’s Public Utilities Board (PUB). The reservoir was created by building a dam across a tributary of the Johor River, as agreed under a supplementary agreement signed in 1990, and has been in operation since January 1995. Raw water drawn from the reservoir is channelled to the three water treatment plants that make up the JRWW.

Together, these plants provide a total output of 1,136mld of water, as stipulated under the 1962 agreement, and the treated water is then supplied to Singapore via pipelines.

Despite this long-standing functional cooperation, water has been at times a major irritant in relations between the two countries, with Malaysia arguing that the treaties favour Singapore. Malaysia has made veiled threats that it might cut off the supply of water or repudiate the water agreements when relations became strained along other fronts.

This caused Singapore to become increasingly concerned about its water supply, and influenced the island-state’s security and foreign policy strategies for decades.

One response that began in earnest during the 1970s was Singapore’s multipronged effort towards water diversification. The country invested significantly in technologies and systems for converting wastewater and seawater into useable forms and improving catchment storage. The results are striking: Treated wastewater (NEWater) now accounts for 30 per cent of Singapore’s total freshwater needs and desalinated water 10 per cent; and Singapore’s water catchment area has increased to two-thirds of the country’s land surface, from 11 per cent in 1970.

Each of these domestic sources continues to grow, and as a result, Singapore has been able to reduce its reliance on Malaysian imports.

Today, roughly 40 per cent of Singapore’s water needs are met by water from Malaysia, compared with 80 per cent at independence in 1965.

Significantly, when the 1961 agreement expired on August 31, 2011, Singapore decided against its renewal and handed over two water treatment plants in Skudai and Gunung Pulai and two water pumps in Tebrau and Pontian to Johor. Singapore has set a target for water self-sufficiency by 2061 — not farfetched, given the pace of technological innovations.

Until then, it will continue to depend on Johor for water.

JOHOR’S GROWING WATER STRESS

As with much of Malaysia, Johor has historically been water-abundant and receives an average annual rainfall of 1,778mm per year. However, water usage in the state is expanding substantially and, when coinciding with drought, has led to serious shortages. Johor is Malaysia’s second-most- populous state after Selangor, with a population of 3.55 million in 2015, and is becoming an international industrial hub.

The state has traditionally been a major producer of agricultural commodities, including palm oil — where it has the highest growth rate in Peninsula Malaysia — as well as rubber, pineapples, coconuts, cocoa and coffee. This agricultural base is being outstripped by growth alongside its border with Singapore.

The Iskandar Development Region (now named Iskandar Malaysia) was launched in Johor in November 2006 as a special zone covering 2,217 sq km, roughly three times the size of Singapore. The zone focuses on the industrial and service sectors, and seeks to capitalise on its synergies with Singapore to create an integrated economic hub. Between 2006 and 2013, it registered cumulative committed investments totalling RM111.37 billion, of which 40.2 per cent has been realised.

Johor’s population is projected to grow to as much as five million in 2030, doubling water demand. This, along with pollution, is expected to strain Johor’s export commitments to Singapore. Discharge from sewage treatment plants, agro-based factories, livestock farming, estate agriculture and domestic sewage all affect the waters of Johor.

In 2008, 14 out of 21 rivers in the Iskandar Malaysia zone had moderate pollution levels while five rivers in the Tebrau catchment exhibited more serious pollution. One river in the Pasir Gudang catchment experienced severe pollution caused by industrial and development activities.

As pollution has worsened, the cost of water treatment has gone up, and industrial and transportation growth in bustling southern Johor are further exacerbating these threats. The results of dry-season water stresses are becoming progressively apparent.

Malaysia receives the bulk of its rainfall between December and March, and 97 per cent of the country’s needs are met by rain-fed surface water. Johor is no exception and in 2010, more than 500,000 people in the districts of Batu Pahat and Kluang were allowed a supply of water for only 12 hours a day, or 24 hours of alternating water supply. The state government also undertook cloud seeding in an effort to increase water levels, to little avail.

The dry conditions of 2015-2016 have revealed still greater threats to Johor’s water sources.

In August and September 2015, Singapore agreed to transfer 22mld to Johor Bakaj (the Johor Water Regulating Body) following low water levels at the Sungai Layang Dam and the Linggui Reservoir.

The Linggiu Reservoir, which has the capacity to supply half of Singapore’s daily demand, was just 31 per cent full by mid-2016, compared with 80 per cent at the start of the year. Singapore’s Minister of Environment and Water Resources Masagos Zulkifli confirmed that the Republic has asked Malaysian water authorities to top up the reservoir.

In June and July alone, Johor Bakaj twice requested additional supplies of water from PUB Singapore, citing supply system shutdowns due to pollution in the Johor River.

The June 4, 2016 request, involving the supply of six million gallons (22.7 million litres) per day for a month, above and beyond the nearly 60mld of treated water that is supplied by Singapore to Johor per day, was due to low water levels from dry weather at Johor’s Sungai Layang dam. In July 2016, Johor Bakaj made an urgent request for an additional supply of 22mld of treated water, this time citing a shutdown of their supply system in Johor Baru due to pollution in the Johor River.

POLITICS, PRICING, AND USAGE

The lack of consumer water efficiency and conservation in Malaysia further complicates matters. Malaysia has the highest per capita water usage in South-east Asia, with a daily water consumption of 280 litres, compared with 155 litres in Singapore, 175 litres in the Philippines and 130 litres in Indonesia.

A key reason is that water in Malaysia is relatively cheap. It is typically not more than 5 per cent of disposable household income and much lower than electricity costs. Johor, however, has among the highest water tariffs among Malaysian states and is unlikely to increase domestic water prices. The state may, in fact, implement targeted water subsidies.

The ruling Barisan Nasional, for example, promised free water to those families who are registered with the MyKasih programme during the 2013 election. The Parti Keadilan Rakyat (People’s Justice Party), meanwhile, has attacked the Johor government for the water shortages that have forced the state to seek additional supply from Singapore.

Singapore, likewise, appears not to be on the path towards pricing in more efficient water use. Its current target to reduce per capita consumption to 147 litres by 2020 and 140 litres by 2030 has been criticised as too modest for a country dependent on significant water imports. While in many swathes of the developed world water prices are increasing to promote its sustainable use, in Singapore 2015 prices were 25.5 per cent lower in real terms, compared with 2000.

Malaysian leaders have long argued that the 1961 and 1962 water agreements priced water at a level that is “too low and unrealistic”. Singapore has typically cited the two water agreements and the Separation Agreement of August 7, 1965 and reasoned that “international law and the sanctity of treaties voluntarily entered into by governments are the foundation of inter-state relations” and must be adhered to.

Singapore has not always opposed an increase in the price of water outright. For instance, during talks between then-Senior Minister Lee Kuan Yew and then-Malaysian Prime Minister Mahathir Mohamad in September 2001, Singapore made a counter-offer of RM0.45 per 1,000 gallons of water to Malaysia’s proposed RM0.60.

Malaysia and Singapore could ultimately not agree on a fair price or the appropriate methodology for discovering one, and, as a result, the 1960-1961 prices have remained.

Recent scarcities in Johor call into question whether the water relationship can remain on an even keel into the coming years and decades. Johor State Public Works, Rural and Regional Development committee chairman Hasni Mohammad has said that Johor will honour its 1962 agreement with Singapore, although “the selling price does not make sense, given the current environment”, adding that “several quarters” have urged the state government to stop supplying water to Singapore due to the current water shortage.

THE FUTURE OF CROSS-STRAIT WATER RELATIONS

Despite these problems, there does appear to be bilateral support for making the Singapore-Malaysia water relationship work. Most notably, a February 2013 agreement between Prime Ministers Lee Hsien Loong and Najib Razak to honour the terms of the 1962 water agreement and implement the “necessary measures to ensure reliable water supply from the Johor River” bodes well for the future of cross-strait water trade.

Both Malaysia and Singapore have also flagged large-scale capital investments into their water systems to improve efficiency and expand treatment and desalination capacity. Malaysia announced that RM13 billion worth of investment in water distribution systems is required to reduce the share of non-revenue water to 25 per cent by 2020, while Johor has asked for an allocation of RM660 million under the 11th Malaysia Plan to build a new dam at Sungai Ulu Sedili.

The Singapore PUB has called a tender for the construction of a fourth desalination plant, anticipated to be completed by 2019, that will add 30 million gallons of water a day to Singapore’s water supply.

But current realities in Johor may overwhelm Singapore’s long-standing arguments based on the sanctity of treaties. Drought conditions — likely to become more pronounced with the changing climate — converged in 2015 to 2016 with increased water usage and pollution in Johor to challenge the foundation of the bilateral water partnership.

The domestic political considerations and diplomatic underpinnings of water pricing in this cross-border region were already tenuous, and growing water stresses may well make them more so. Responding to this situation will require regulatory diligence and clear-minded diplomacy by the authorities in Johor and Singapore as well as in Kuala Lumpur.

Specifically, it is in Singapore’s interest to continue its collaboration with Malaysia on Johor’s catchment management, given its dependence and its considerable experience in the sector.

Diversifying imports to include sources from Riau, Indonesia, is also not beyond imagination, but has been made less likely by the island’s progress in its domestic water sector. Regardless of the specific mechanisms used, it is important that such resource protection and management efforts do not fall victim to the rush for economic growth. If this occurs, such growth might undermine the very cross-border relations that it calls upon and attempts to strengthen.

ABOUT THE AUTHORS:

Jackson Ewing is Director of Asian Sustainability and Karissa Domondon is an Intern at the Asia Society Policy Institute, Asia Society. This is an excerpt of a longer piece in Perspective, published by ISEAS-Yusof Ishak Institute.

A more comprehensive study of the subject is included in the recent ISEAS book The Sijori Cross-Border Region. Transnational Politics, Economics and Culture.