Operating cost of water system jumped S$0.8b in 15 years

SINGAPORE — It cost about S$1.3 billion to operate Singapore’s water system in 2015, compared with S$0.5 billion in 2000, national water agency PUB has disclosed.

Over those 15 years, it invested about S$7 billion in water infrastructure, and will pump in about S$4 billion over the next five years from 2017 to 2021 to boost the infrastructure and resilience of the water system to meet growing demand.

The agency shared these figures in response to TODAY’s queries on how it determined the 30 per cent hike in water price that was announced in the Budget statement on Monday.

The increase includes all the components of the total water price, namely the water tariff, the water conservation tax and used water charges.

PUB said that in 2015, the S$1.3 billion was spent on water treatment, reservoir operations, NEWater production, desalination, used water collection and treatment, and the maintenance of the island-wide network of water pipelines, among others.

“Over the last 17 years, costs have increased and adjustments are needed to reflect the latest costs of water supply. The increase in water price will also allow us to continue investing ahead of time so all of us can continue to enjoy a high quality and reliable water supply,” a PUB spokesperson said.

Water is priced to reflect the cost of water supply and the scarcity value of water, PUB said.

The total water price is pegged to the long-run marginal cost of water supply — or how much it costs to supply and convey the next drop of water, which is likely from desalination and NEWater.

Speaking at Channel NewsAsia’s Singapore Budget Forum yesterday, Minister for National Development Lawrence Wong said that he understands the public’s concerns over the price hike, but added that “there is never an ideal time” to raise prices. He highlighted that “water for us is a matter of national survival ... of strategic importance”.

Water prices will go up by July next year, and a partial increase will take effect on July 1 this year. From S$2.10 per cubic metre, domestic users will pay S$2.39 from July 1, and S$2.74 a year later.

Mr Wong said the Government would give out Goods and Services Tax vouchers to help households offset the increases.

“We are mindful that everyone may be in different circumstances and even the rebates might not be enough for some, so we will look at different ways to help them … There is a range of local financial assistance schemes, including through ComCare, that we can provide for those in need,” he said.