Price hike debate should remind S’poreans of water’s importance: PM

SINGAPORE — Addressing a growing public debate about the Government’s move to raise water prices by 30 per cent, Prime Minister Lee Hsien Loong and Finance Minister Heng Swee Keat said the Republic has to price water properly in order to be able to continue investing in new infrastructure that would maintain a reliable supply.

In a Facebook post on Thursday (March 2), Mr Lee reiterated comments by several ministers in recent days that water is a “strategic resource, and a matter of national security” for Singapore.

“The Pioneer Generation knew this. So do the generations of servicemen and women who have defended Singapore,” he added. “In this situation, we have to price water properly. Then every time we turn on the tap, we are conscious of how precious each drop is.”

As Singapore builds more NEWater and desalination plants to meet its needs, the cost of producing water has gone up, and “tariffs must rise”, Mr Lee noted.

He urged Singaporeans to see the price hike in perspective, saying many households will get additional rebates to help cope while the water bills for some 75 per cent of businesses will go up by less than S$1 a day.

“I hope this public debate reminds us how important and valuable water is, and how we can all help to conserve water, so that we always have enough water in Singapore,” he added.

Mr Heng, who announced the price hike last month, struck a similar note as he responded to a slew of questions and comments by Members of Parliament who spoke on the issue during this week’s debate on the Budget statement.

Among them were Workers’ Party MPs, who sought more clarity on how the quantum of increase was determined, and the timing of the hike. 

On Thursday, Ms Sylvia Lim (Aljunied GRC) pointed out that the reasons for the water price hike so far were long-standing ones, but water prices did not change for 17 years. 

Moreover, the impending carbon tax has a two-year lead time for implementation, but no announcement was made two years in advance for the water price hike, she pointed out, adding that perhaps July 2015 — two months before the General Election was held — was not a good time for the announcement. 

Mr Heng said the carbon tax is new and details have to be studied carefully. 

Fundamentally, the point is whether Ms Lim agreed on water’s strategic significance, he added.

Mr Heng also said that the cornerstone of Singapore’s water policy is in pricing the resource on sound economic principles to reflect its long run marginal cost. 

Currently, the Government spends more than it collects on the water system, with the PUB’s revenue from users just enough to cover operational costs and the depreciation of water works, pipelines and other related plants, Mr Heng added.

The imbalance is set to get worse over the next five years as the PUB embarks on new multi-billion-dollar water infrastructure projects, such as sewerage networks and deep tunnel systems.

“Singaporeans have enjoyed uninterrupted and high quality drinking water through rainy weather and droughts alike,” Mr Heng said. 

“This is not mere good fortune or our birthright. Rather it is the result of long term planning, can do attitude, innovation and sound policy.”