Water prices set to increase this year due to higher production costs: Masagos

Lee Li Ying, Channel NewsAsia 7 Feb 17;

SINGAPORE: Water prices are set to increase this year, Minister for Environment and Water Resources Masagos Zulkifli announced on Tuesday (Feb 7).

The minister declined to specify how much the increase would be but said more details would be revealed during Budget 2017, which is set to be delivered on Feb 20.

Mr Masagos said the projected increase was due to higher costs in producing water, taking into consideration factors such as urbanisation and the need to dig deeper to lay pipes, as well as the need to renew old plants and transmission pipes.

"Together with the need to put up with weather that's less reliable than before as well as to ensure that we are operationally sound, we have to ensure that this is sustainable for Singapore," added Mr Masagos.

The minister also said that the price of water has remained constant for the past 17 years, and is currently underpriced. Including the water conservation tax, water in Singapore currently costs S$1.52 per cubic metre.

"In countries around the world where water is not priced properly, the water ministry is not able to recoup the costs enough to build new assets to replace old assets and sometimes assets are left in disrepair. Even if they do have water, water cannot get to where it's needed," Mr Masagos said.

PUB CALLS FOR PROPOSALS FOR FIFTH DESALINATION PLANT

Mr Masagos also announced that national water agency PUB has put up a request for proposals for the development of Singapore's fifth desalination plant.

Four applicants shortlisted from an earlier pre-qualification exercise - Keppel Infrastructure Holdings, Sembcorp Utilities, Tuas Power and YTL Power International - have been invited to submit their proposals, PUB said in a press release.

According to PUB, the new plant is projected to enhance Singapore's water resilience by adding another 137,000 cubic metres of desalinated water a day to the country's water supply.

The desalination plant will be co-located within the successful applicant's existing facility, such as a power plant or a steam generation plant on Jurong Island, so that potential synergies in resources such as seawater intake or energy can be derived, the agency added.

PUB director of engineering development and procurement Young Joo Chye said that as a source of water that is independent of rainfall, desalinated water "bolsters the reliability of our water supply against prolonged periods of dry spells and droughts".

There are currently two desalination plants in Singapore which provide enough water to meet up to 25 per cent of Singapore's current demand. With the completion of a third plant in Tuas by this year and a fourth in Marina East by 2020, desalinated seawater is expected to meet up to 30 per cent of Singapore's water needs by 2060.

- CNA/mz


Water prices to go up, details to come in Budget: Masagos
NEO CHAI CHIN Today Online 7 Feb 17;

SINGAPORE — Water prices will be raised, with details to be announced during this year's Budget, said Minister for the Environment and Water Resources Masagos Zulkifli on Tuesday (Feb 7).

Speaking during a visit to Tuas Desalination Plant 3, which is 60 per cent completed, the minister cited the anticipated higher costs of producing water and the need to price water right in view of the less reliable weather as reasons behind the first price adjustment in 17 years.

Noting that water is currently underpriced, Mr Masagos said: "Going forward we are seeing higher costs in producing water. This is not just because of the plant. We also have to take in consideration urbanisation and therefore our pipes have to be dug even deeper."

He added: "At the same time we are also looking at renewing old plants, old transmission pipes and this will definitely add costs to our operations.”

Mr Masagos also noted that Singapore needs to be ready for weather that is “less reliable than before”. To ensure that the country is “operationally sound” in producing water, “we have to price water right”, he added.

Currently, water tariffs are tiered, depending on whether it is for domestic, non-domestic or shipping use. For domestic users, there are two levels of tariffs (S$1.17 per cubic metre or S$1.40 per cubic metre), depending on consumption volume.

Water conservation tax is 30 per cent of the tariff, before GST.

Mr Masagos did not give an indication of how much prices would go up by. He said there was a need to balance the sustainability of supply and reflect the scarcity of water.

Singapore's four national taps are water from Malaysia, the local reservoirs, desalination and NEWAter.

There is no need for water rationing at the moment, Mr Masagos said.

In the past year, the Linggiu reservoir that helps Singapore to draw its entitlement of water from the Johor River has hit record lows and Minister for Foreign Affairs Vivian Balakrishnan recently warned of a "significant risk" of Linggiu falling to zero per cent this year, if it turns out to be a dry year. Singapore gets about half of its water from Malaysia.


Price of water to increase for the first time in 17 years
NEO CHAI CHIN Today Online 7 Feb 17;

SINGAPORE — Water prices will go up after holding steady for 17 years, Minister for the Environment and Water Resources Masagos Zulkifli said on Tuesday (Feb 7), less than a month after he said the Government would adjust water charges when necessary.

Details such as the extent of the increase and when the new charges will take effect will be announced on Budget Day on Feb 20, he said during a visit to the Tuas Desalination Plant 3, which is set to be completed in November. The increase will apply to both households and non-domestic users.

Mr Masagos cited the anticipated higher costs of producing water and the need to price water right in view of the less reliable weather as reasons behind the price adjustment.

“Going forward, we have to ensure that assets we’ve put in (place) to prevent a critical situation of water disruption from Johor are also priced into water supply,” he said. The Linggiu Reservoir, which allows Singapore to draw water more reliably from the Johor River, is at 32 per cent. Singapore gets about half of its water from Malaysia, but Johor has experienced water supply issues in recent years.

Should dry weather return after the monsoon season, as it did in the last two years, there is a real risk that Linggiu could fail over the next two years, Mr Masagos posted on Facebook on Tuesday after the Tuas visit. “We need to plan for such contingencies, and make timely investments so that we will not be caught off-guard.”

Also adding costs to water operations are the fact that pipes have to be dug deeper due to urbanisation, and the renewal of old plants and pipes.

The use of desalination, the costliest and most energy-intensive of Singapore’s four “national taps”, is also set to increase to meet 30 per cent of the country’s water demand by 2026, from 25 per cent now. The other national taps are NEWater (treated used water) and water from local catchment areas.

Currently, water tariffs are tiered, depending on whether the water is for domestic, non-domestic or shipping use. For domestic users, there are two levels of tariffs (S$1.17 per cubic metre or S$1.40 per cubic metre), depending on consumption volume. Water conservation tax is set at 30 or 45 per cent of the tariff.

Mr Masagos said that water in Singapore is currently underpriced and “every time we have to pump from our NEWater and desalinated water (plants), it adds to the cost pressures operationally.”

Water policy expert Eduardo Araral at the Lee Kuan Yew School of Public Policy said the increase in water prices is “long overdue”. It is necessary to reduce consumption of both water and energy , and raising water tariffs is “a form of buying insurance, given the reality of climate change and the recurring droughts we now experience”.

While there should be measures to cushion the impact on poorer households, Dr Araral said middle and higher income households will not feel the pinch. According to data on Singapore Power’s website, the average water consumption of a five-room HDB household was 17.7 cubic metres in December last year — a bill of about S$27 before Goods and Services Tax. If prices rise by 25 per cent to compensate for inflation since the last revision, it is roughly the cost of a meal in the hawker centre, noted Dr Araral.

Dr Cecilia Tortajada of the LKYSPP said climate change and variability are putting enormous pressure on natural resource availability around the world, including water in Singapore.
“Populations have to be more aware that their decisions have an impact on the environment and pricing mechanisms are a very effective way to make people be more mindful of their use of resources,” she said. “It is now time for the population to (do) its part in water conservation.”

In 2013, Dr Tortajada and Professor Asit Biswas had said water prices in Singapore should be raised by at least 30 per cent.

The average water consumption per person per day here is about 151 litres, and the PUB’s target is to reduce it to 147 litres per day by 2020, and 140 litres per day by 2030.
Singapore consumes about 430 million gallons of water per day, with homes consuming 45 per cent and the non-domestic sector taking up the rest. By 2060, total water demand could almost double, with the non-domestic sector accounting for about 70 per cent. By then, NEWater and desalination will meet up to 85 per cent of Singapore’s future water demand, according to the PUB.

Singapore launched its fifth NEWater plant last month and has two more desalination plants to be completed by 2020. On Tuesday, the PUB requested for proposals from four pre-qualified applicants to build the fifth desalination plant, which will be on Jurong Island.


Water price hike to boost Singapore's water security: Masagos
The New Paper 8 Feb 17;

Water is set to cost more here, as Singapore seeks to ensure long-term water security in face of uncertain weather conditions.

An increase in water prices will be announced at the upcoming Budget, as well as further moves towards desalination, said Minister for the Environment and Water Resources Masagos Zulkifli.

The price increase will help ensure the reliability of the country's water infrastructure, as well as support reliable but more expensive sources of water like desalination.

Mr Masagos said at a tour of the partially completed Tuas Desalination Plant 3 yesterday that the price of water has not been revised for many years and that it is underpriced.

He highlighted the importance of alternative water sources like desalination in the face of uncertain weather conditions in the future, noting that Johor's Linggiu Reservoir may dry up completely if dry weather continues for the next two years.

Desalinated water is one of Singapore's Four National Taps and is the most expensive because of the energy required to extract salt from seawater at high pressure. The other taps are Newater, water from local catchment areas and imported water. - THE STRAITS TIMES


Price of water will go up to ensure sustainable supply
Lin Yangchen, The Straits Times AsiaOne 8 Feb 17;

For the first time in 17 years, Singapore residents will have to pay more for water, as the nation seeks to ensure long-term water security.

Details of the increase in water prices for both domestic and non-domestic users will be in the upcoming Budget to be announced on Feb 20, said Minister for the Environment and Water Resources Masagos Zulkifli.

He said on a visit to Singapore's partially completed third desalination plant in Tuas yesterday that water has to be priced correctly to ensure a sustainable supply and reflect the scarcity of the resource.

The tariffs for domestic potable water, calculated monthly, stand at $1.17 per cubic m for the first 40 cubic m, and $1.40 per cubic m thereafter, excluding taxes.

The cost of producing and supplying water has increased, because of reliable but more expensive methods such as desalination and the need to renew ageing infrastructure like old production plants and pipes.

"In many countries where it is not priced properly, the water ministry is not able to recoup cost enough to build new assets to replace old assets, and sometimes, assets are just left in disrepair to the extent that even though they may have water, the water cannot get to where it is needed," said Mr Masagos.

"Water is a very critical asset that we have to take care of."

Experts have long called for the relatively inexpensive water prices to be raised in Singapore, as this would encourage people to reduce consumption.

Mr Masagos also noted the importance of diversifying water production methods. "If there is a more prolonged dry season affecting the region, Linggiu will actually run out in about two years. And therefore, we always must be ready to ensure that we have enough assets... to supply water to Singapore."

The Linggiu Reservoir in Johor supplies Singapore with up to 250 million gallons of water a day under an agreement with Johor.

Mr Masagos said that even in a worst-case scenario, Singapore should not need to resort to water rationing, due to its diversified sources.

Desalinated water is the most expensive of Singapore's four National Taps - with the other three being imported water, water from local reservoirs and Newater - given the energy needed to extract salt from seawater at high pressure.

Nonetheless, said Mr Young Joo Chye, director of engineering development and procurement at national water agency PUB, it remains a key pillar of Singapore's water supply strategy. "As a source of water that is independent of rainfall, it bolsters the reliability of our water supply against prolonged periods of dry spells and droughts."

Two desalination plants are now in operation here, meeting up to 25 per cent of Singapore's water demand of 430 million gallons per day.

Desalination will meet up to 30 per cent of demand by 2030, when at least five plants are expected to be operational.


Water price hike: Water users worried but see need to curb wastage
Carolyn Khew and Lin Yangchen, The Straits Times AsiaOne 8 Feb 17;

Consumers and businesses have voiced concerns about water rates being hiked, even if some acknowledge that there is a need to do so to curb wastage of the scarce resource.

Restaurant Association of Singapore president adviser Andrew Tjioe said he hopes the Government will factor in the present economic climate when deciding on the price increase.

"We have other things to take care of like operation costs, which are very high," he said.

Yesterday, Minister for the Environment and Water Resources Masagos Zulkifli said the price increase is meant to ensure the reliability of Singapore's water infrastructure, and to reflect the scarcity of water.

This is the first time in 17 years the price is being increased.

The details will be announced during Budget 2017 on Feb 20.

Car-grooming firm Groomwerkz's managing director Tan Thiam Yong said higher prices for water usage could prompt users to be better at conserving the resource.

"For us, we have already done all that we can to save water but for those who are not at their optimum, it might prompt them to do so," said Mr Tan.

His company is now looking to recycle 90 per cent of the water used for car-grooming services, including car washing, by the end of the year.

Housewife Ng Kah Kiow, 54, who lives in Toa Payoh, said: "Naturally, we hope prices will not increase, but we understand that costs are going up and water is precious."

Professor Asit Biswas, visiting professor at the National University of Singapore's Lee Kuan Yew School of Public Policy, said the domestic water price should be raised by at least 50 per cent, with subsidies for low-income and large families.

The price of water should be doubled for industrial users, so that companies will increase efforts to reduce water use, he added.

He said there should also be yearly increments according to the inflation rate, to encourage people to reduce consumption.

The tariffs for domestic potable water, which are calculated monthly, stand at $1.17 per cubic m for the first 40 cubic m and $1.40 per cubic m thereafter, excluding taxes.

Prof Biswas said Singapore would have a water crisis if the Linggiu Reservoir does dry up.

It is now at about 32 per cent full.

The reservoir allows Singapore to draw its entitlement of 250 million gallons per day from the Johor River.

Kopitiam, which operates about 80 foodcourts and coffee shops, is hoping the price increase will not be significant.

"Any price increase will definitely affect business costs... Let's hope that the price increase won't be too hefty," said a spokesman.