Singapore

Water prices to go up by 30% by July 2018

Water prices to go up by 30% by July 2018
According to the PUB, those who use NEWater will have a new water conservation tax imposed, that is 10 per cent of NEWater tariffs. TODAY File Photo
Increase will be phased over two years starting this July
Published: 4:21 PM, February 20, 2017
Updated: 10:40 PM, February 20, 2017

SINGAPORE — Turning on the tap will be more costly from July, when the first of two rounds of water price hikes takes effect. Water prices will go up a total of 30 per cent by July next year, said Finance Minister Heng Swee Keat in his Budget speech on Monday (Feb 20).

For the average household living in a public flat, this will mean forking out roughly S$9 to S$15 more a month before the Government’s additional U-Save vouchers.

After the additional U-Save rebates, one- to two-room flat households would see their water bill go down by S$1, while an executive flat household would see a smaller increase of about S$11 in its water bill.

Three- to five-room flats will likely fork out S$2 to S$8 more a month. Currently, Housing and Development Board households pay about S$26 to S$49 a month for water.

Earlier this month, Minister for the Environment and Water Resources Masagos Zulkifli had declared water prices would go up after remaining unchanged for 17 years. The scarce resource has been underpriced and the increases are due to higher operational costs and greater investments in water infrastructure.

Singapore’s water comes from four “national taps”. About half is imported from Malaysia, and the rest is from local catchment areas, NEWater (treated used water) and desalination. But Singapore has had dry weather and Johor has experienced water supply issues in recent years.

Water sufficiency is a matter of national survival, said Mr Heng. “We have priced water to reflect the higher costs of desalination and NEWater production because every additional drop of water has to come from these two sources,” he said. “The cost of water production and transmission has increased as we build more desalination and NEWater plants, and lay deeper pipes through an urbanised environment… We need to update our water prices to reflect the latest costs of water supply.”

The increase consists of higher water tariffs and water conservation tax, as well as restructured waterborne and sanitary appliance fees for used water. The sanitary appliance fee — presently S$2.80 per fitting — will be combined into the waterborne fee, which goes towards treating used water. From July, the waterborne fee will be 78 cents per cubic metre for households that use less water, and the fee will go up to 92 cents from July next year. The waterborne fee will be over S$1 per cubic metre for larger domestic consumers who use more than 40 cubic metres per month.

The increase in prices is in line with what water policy experts like Professor Asit Biswas and Dr Cecilia Tortajada have proposed in recent years. In their latest commentary on Monday, they said water should be priced to provide a sustainable financial model, while targeted subsidies should be given to poorer households.

Consumers like Serene Choo, 33, said the increase would add to household expenditure. “I think the price increase is inevitable and is linked to economic and environmental factors,” said the mother of two. Her water bill, at around S$17 per month, is already below the national average for a four-room household and Mrs Choo said cutting down would be tough as daily activities such as cooking, washing and bathing still need to carry on.

For non-domestic users such as building owners and industry, water prices will increase by 27 per cent. From S$2.15 per cubic metre, the price will hit S$2.74 per cubic metre from July next year — the same price as smaller domestic users. Those that use NEWater will have a new water conservation tax imposed, comprising 10 per cent of NEWater tariffs.

Mr Lee Soon Kiat, executive committee member of the Singapore Semiconductor Industry Association, hoped the government could provide more one-time grants for companies to explore water recycling and conservation. Wafer fabrication, semiconductor and electronics firms make up 13 per cent of non-domestic water demand and while the industry understands why the Government is making water more costly, it is also concerned about losing competitiveness to other countries, he said.

Property firm CDL’s chief sustainability officer Esther An said the tariff hikes are expected to increase operating costs of the properties it manages, which will give “additional impetus” to water conservation efforts. CDL will step up its engagements of tenants in this regard, she said.

About 25 per cent of water usage at its buildings is currently NEWater, which has helped the company to achieve savings as NEWater is cheaper than potable water. Its measures to save water include water-efficient fittings and rainwater harvesting systems at its developments and the deployment of grey water membrane filtration plants at worksites to recycle construction water for cleaning and desilting, added Ms An.

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 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.

The average person uses about 151 litres of water a day and PUB aims to cut consumption to 140 litres per day by 2030. ADDITIONAL REPORTING BY SIAU MING EN