WP questions need for water price hike

SINGAPORE — Workers’ Party (WP) Members of Parliament yesterday questioned the decision to raise water prices, calling on the Government to thoroughly explain how the impending 30 per cent hike was calculated. They also suggested that the timing was “political” to avoid having to raise prices when elections draw near.

Speaking in Parliament yesterday during the debate on the Budget statement, Mr Pritam Singh (Aljunied GRC) raised a slew of questions, seeking to “understand the decision-making processes” behind the increases.

“I believe a deeper explanation from the Government about how it prices water and its long-run cost imperatives would enable the public to better understand and rationalise this water price hike, in addition to improving public understanding of this issue,” said Mr Singh, who noted that the water price hikes came on the back of other municipal price increases. These include the increases in HDB car park charges, higher electricity tariffs, and higher service and conservancy charges — all within the last three months.

Last week, Finance Minister Heng Swee Keat announced that water prices would go up by 30 per cent in two phases, in July this year and July next year. Noting that water sufficiency is a matter of national survival, he said the authorities 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”.

PUB has also said that the total water price is pegged to the long run marginal costs of water supply — on which Mr Singh pressed for more details, asking how PUB calculates the components of these costs and assesses when water prices should be raised.

Turning to the time period used for its projections, Mr Singh also questioned if the authorities are looking at the expiry of the water agreement with Malaysia in 2061, or when Singapore’s water consumption is expected to double, for instance.

He also asked if the record low levels in Linggiu Reservoir — which enables Singapore to reliably draw water from the Johor River to meet half of its water needs — were a factor in deciding to raise prices.

Instead of solely relying on water pricing to promote conservation, Mr Singh suggested that the Government turn to creative pricing strategies, such as lowering taxes for those who use less water.

WP Non-Constituency MPs Leon Perera and Dennis Tan also questioned the timing of the water price hikes, with Mr Perera suggesting that the timing of the recent price hikes “seem more synchronised to the political cycle than to the economic cycle”.

“What is the justification for these price hikes and their timing? Hitting the economy with these multiple price hikes within the space of a few months may make good political sense, because people have three years to forget them before the next General Election,” Mr Perera said.

Even with U-Save rebates to cushion the hikes, Mr Tan said there would be firms, such as those in the food and beverage industries, that will be affected. This could have an adverse “chain effect” that leads to increases in the cost of living.

Mr Lim Biow Chuan (Mountbatten) urged the Government to “consider a stay on water price increases” for this year amid the uncertain economic situation. Due to “rumour-mongering”, many people have been caught up with the impending price hike that they forgot about the measures introduced to mitigate he price increase, he said.

East Coast GRC MP Lee Yi Shyan called the hike a “necessary and small insurance”. While Singapore was subject to the same dry season as neighbouring Malaysian states last year, it did not have to resort to water rationing, said Mr Lee, who was formerly Senior Minister of State for National Development and Trade and Industry.

“The belated 30 per cent hike, put in context, is a necessary and small insurance compared to the hundreds of millions of dollars we need to set aside for future water plants and infrastructure,” he said.

Meanwhile, Nee Soon GRC MP Henry Kwek called on the Government to monitor the effects of the fee hike on individuals and businesses, to see if further tweaks are necessary. ADDITIONAL REPORTING BY KELLY NG