KUALA LUMPUR — Malaysian Prime Minister Mahathir Mohamad is seeking to renegotiate a longstanding water supply deal with Singapore, criticising a 1962 agreement with the Republic as “too costly” and "manifestly ridiculous".

His remarks on the water issue, coming weeks after he announced plans to cancel a multibillion-dollar high-speed rail project that would have connected Kuala Lumpur to Singapore, raise further questions on how the new Malaysian government would handle bilateral ties with Singapore that have been on an even keel for an extended period.

Foreign Minister Vivian Balakrishnan responded indirectly to Dr Mahathir's comments on Monday (June 25) afternoon, posting a video on the Republic's quest for water security and remarking: "Why water has always been sacrosanct in Singapore."

Asked about Dr Mahathir's comments, the Ministry of Foreign Affairs (MFA) said that the 1962 Water Agreement is a fundamental agreement guaranteed by both governments in the 1965 Separation Agreement which was registered with the United Nations.

"Both sides must comply fully with all the provisions of these agreements," a MFA spokesman said.

In an interview with Bloomberg published on Monday, Dr Mahathir said water is among issues with Singapore “that we need to settle”, adding: “We will sit down and talk with them, like civilised people.”

Speaking later in a separate interview with Channel NewsAsia, Dr Mahathir said Malaysia will present its case on the water agreement to Singapore in due course.

"I think it is manifestly ridiculous that you should sell water at 3 sen per thousand gallons. I mean, that was okay way back in the 1990s or 1930s, but now, what can you buy with 3 sen. Nothing," he said.

"We are studying the case properly and then we’ll make a presentation."

Under the 1962 Water Agreement, which expires in 2061, Singapore’s national water agency PUB may draw 250 million gallons of raw water from the Johor River daily at 3 sen (1.01 Singapore cents) per thousand gallons.

In return, Johor is entitled to receive a daily supply of up to five million gallons of treated water - or 2 per cent of the water supplied to Singapore - at 50 sen per 1,000 gallons.

Dr Mahathir had stated erroneously in the Bloomberg interview that Malaysia can buy back up to 12 per cent of the treated water at Singapore's price of S$17 per 1,000 gallons, which he described as "a lot of money".

The 1962 agreement, along with another 1961 agreement which expired in 2011, have been a constant source of public political wrangling over the years.

In the late 1990s and early 2000s, during Dr Mahathir's first term in office, the price of water that Malaysia sells to Singapore was part of a package of bilateral issues being negotiated by both sides.

Malaysia indicated then that it would take unilateral action to raise the price, quoting 45 sen per thousand gallons in August 2000, before raising it to 60 sen six months later and then RM6.25 in September 2002.

Singapore maintained that the water agreements were guaranteed by the Malaysian government in the Separation Agreement in 1965 and that Malaysia cannot unilaterally revise the price. 

"The heart of the water issue is not how much Singapore pays for water, but how Malaysia wants to revise the price of water," the Singapore government said in a factsheet on the issue in February 2003.

"We cannot let Malaysia change the terms and conditions of the 1961 and 1962 Water Agreements whenever they are unhappy. Malaysia cannot break their solemn word at a whim," it added.

"If Malaysia can increase the price of water as and when they liked, what is the value of other agreements we have signed with them? Where will it all end?"

The water issue subsided only after Dr Mahathir stepped down in 2003. 

In December 2016, then Malaysian prime minister Najib Razak said Malaysia will supply Singapore with the share of water due to it under the 1962 agreement despite challenges that affect the water supply from Malaysia, such as the receding water levels at Linggiu Reservoir.

At a Leaders Retreat in Singapore in January this year, Datuk Seri Najib and Prime Minister Lee Hsien Loong said in a joint statement that they reaffirmed the importance of undertaking measures to ensure the reliable and adequate water supply from the Johor River as provided for in the 1962 agreement.

"Both countries also affirmed the terms of the 1962 Water Agreement," the statement said, adding that the two countries will carry out a hydrometric modelling study of the Johor River, with the aim of increasing its yield and conserving supply in the Linggiu Reservoir.

In his interview with Channel NewsAsia, Dr Mahathir said Singapore has not been informed of Malaysia's decision on the water agreement and the high-speed rail project.

"Sometimes, we make public statements without actually finalising the process. Of course if we want to make a decision, we don’t wait until we inform Singapore. We will inform them in time," he said.

Pressed for a time frame, he said: "It’s not so urgent."

Dr Mahathir, 92, who earlier this month also announced that his administration would review a new trading link between the stock markets of both countries, maintained that Malaysia will work with Singapore to resolve any issues.  

"Whether we like it or not, Singapore is our closest neighbour and we have a common history... we have to live with each other. There’ll be little problems, conflicts and all that, we resolve."

He had earlier told Bloomberg that he would be friendly with Singapore and other nations while focusing on striking fair deals and ensuring balance.

“I think we can benefit from each other,” he added. “We need the expertise of Singapore. Lots of Singapore people invest in Malaysia because it’s much cheaper here.” AGENCIES

A long history of Malaysia using water supply issue to threaten Singapore
 
SINGAPORE - Malaysia’s sale of water to Singapore – guaranteed under two bilateral agreements signed in 1961 and 1962 - has been a constant source of tension in bilateral ties since the Republic’s independence in 1965.
 
“If Singapore’s foreign policy is prejudicial to Malaysia’s interests, we could always bring pressure to bear on them by threatening to turn off the water in Johor,” Malaysia’s first Prime Minister Tunku Abdul Rahman told the British High Commissioner in Malaya on August 9, 1965.
 
The attitude that water could be used as leverage against Singapore persisted over the decades and at one point, founding Prime Minister Lee Kuan Yew said he was prepared to send troops to Malaysia if it tried to cut off the supply.
 
Tensions over the water issue were arguably at their highest between 1998 and 2002, during Dr Mahathir Mohamad’s first term as prime minister.
 
In 1998, Malaysia threatened to cut water supply to Singapore in response to the latter’s decision to move its immigration and customs checkpoint away from the old Tanjong Pagar railway station.
 
Dr Mahathir told a rally in Johor Baru that his country’s “good nature” should not be taken for granted by others.
 
Relocation of the checkpoint, a revision of the price of water and the future supply of water to Singapore for 100 years after 2061 were part of a package of outstanding bilateral issues both countries were negotiating at the time.
 
In January 2002, four weeks after Dr Mahathir and Mr Lee, then serving as Singapore’s Senior Minister, agreed in principle on a water deal, Dr Mahathir again said the offer by Singapore was too cheap, adding that Malaysia was “obviously” being underpaid.
 
Dr Mahathir and several Malaysian politicians alleged that Singapore was making “enormous profits” of up to RM700 million annually from the deal, and that the water agreements were only “an ancient piece of paper” — claiming that Malaysia can raise the price anytime it wants.
 
In December that year, Malaysia’s Foreign Minister Syed Hamid Albar declared publicly that “Singapore has two choices. If it refuses to compromise, go to war.”
 
By early 2003, Singapore had issued a series of statements and documents to rebut Malaysia’s accusations, explaining that under the two water agreements, Malaysia should have asked for a price revision in 1986 and 1987 but chose not to do so.
 
Singapore said that it pays 3 sen for raw water because it bears the full cost of treating the water as well as building, operating and maintaining the pumps and pipelines whereas Johor bears nothing.
 
Singapore added that it “is being generous” by selling treated water to Malaysia at 50 sen per 1,000 gallons as the real cost of treatment is in fact RM 2.40. Malaysia is "making easy money from this cosy arrangement" because it sells the treated water to Johor citizens at RM3.95 per 1,000 gallons – a 700 per cent profit.
 
In March 2003, Singapore also released a booklet titled “Water Talks? If Only It Could” which made public the correspondence between both countries.
 
In it, it accused Malaysia of "shifting the goalposts" by constantly stalling and changing positions.
 
In response, Mr Syed Hamid Albar said, “The only one who is unfair and unreasonable is Singapore.”
 
Malaysia upped the ante in July that year via a nine-day media blitz, splashing advertisements across local newspapers, alleging that Singapore had profiteered from Malaysia’s raw water supply, and that “developing Malaysia (was) subsidising affluent Singapore”.
 
Tensions over the water issue subsided only after Dr Mahathir stepped down in October 2003.

But his re-election last month and his latest comments on reviewing the 1962 water agreement could mark a return to the days where Malaysia uses its supply of water to threaten Singapore, even though the Republic has reduced its reliance on Malaysia for water through new technologies, desalination and better water catchment and recycling. KELLY NG