SINGAPORE: Handing out rebates to people who save water would be “counter-intuitive” to ensuring they pay for the cost of producing water, said Minister for the Environment and Water Resources Masagos Zulkifli on Wednesday (Mar 1).
“To give back that cost means we are subsidising the use of water,” he explained. “Any way we change the (price) structure of water that we have today either involves cost or is counter-intuitive to trying to promote the conservation of water.”
Mr Masagos was responding to a point made by opposition Workers’ Party (WP) Member of Parliament (MP) Pritam Singh against the 30 per cent water price hike announced as part of Budget 2017 last week.
The day before, Mr Singh had also asked for a more detailed breakdown from the Government on its water pricing methods, while WP’s Non-Constituency MPs (NCMPs) Dennis Tan and Daniel Goh both highlighted the impact the water price hike could have on the cost of living in Singapore.
On Wednesday, fellow WP MP Png Eng Huat asked about the scale of losses made supplying water. “If this Government is bent on raising the price of an essential commodity by 30 per cent, it is certainly the right time to open the books to Singaporeans to justify the increase,” he said.
In response, Mr Masagos said: “We are unable to provide details of computation because of commercial sensitivities. We still need to build more desalination plants and NEWater plants. As more desalination, NEWater and water reclamation plants are yet to be built or expanded, revealing the specifics … could prejudice future bids.”
He assured the House that the cost reflected the best the market could offer and added that technology was also taken into account in the latest review.
“Technologically, we have squeezed everything we can from the current water processing technology,” said Mr Masagos. “It will take several more years to achieve the next breakthrough and bring it to a deployable scale.”
On the magnitude of the increase, he said: “Thirty per cent price revision translates to less than a dollar a day for 75 per cent of our businesses; and still within 1 per cent of household income for water expenses."
“I am heartened that some businesses have taken this increase in context and have explicitly said that they would not increase prices,” Mr Masagos added.
SECURING WATER SUPPLY
Mr Singh further sought a number of clarifications after Mr Masagos’ speech, one of which was on how PUB assesses when to increase the price of water.
“On the issue of books in PUB, it is very complicated for me to attempt to simplify what the numbers really mean,” said Mr Masagos. “Our books are in accruals; our budget is in cash, and I have to reconcile them.”
“I will ask the Minister for Finance to look at the whole-of-government approach in funding our water infrastructure. That makes more sense. Some parts are Government-funded, some parts are PUB-funded. It does not add up if we look at each book separately.”
Mr Singh also asked if PUB would consider deepening local reservoirs to increase the local catchment.
Said Mr Masagos: “Unfortunately, the answer is not as simple as the question. Currently, studies show there’s a particular yield from a reservoir if you leave it as it is, and there’s a risk this yield can be reduced if you start disturbing the bottom of the reservoir.
“So we don’t want to do something adversely affecting the yield of the reservoir … I’ve asked our experts to study this further … But right now, the prospects are not fantastic.”
Mr Masagos also said that at present, there was no need to directly supply NEWater to homes to save costs.
“Theoretically we can, but we don’t have to right now and certainly when we need to, we have to put the right processes to ensure … it is safe for our house to drink from end to end,” he explained.
Mr Singh had also asked if there would be another price hike if water levels in Malaysia's Linggiu Reservoir dropped to zero.
“The price of water as it stands today … is the price of producing the next drop of water - if for whatever reason the next drop of water that we need to draw will be coming from desalination or NEWater, it’s already priced in,” said Mr Masagos.
“The problem is not the price. The problem is what can we do to prevent that from happening. It’s not just an issue of supply, it’s a very complicated issue should that situation ever occur to us."