Singapore Water Industry, Thanks To You Know Who

Saturday, 10 November 2012 06:34

S'pore - thanks to Malaysia's Dr M, our water industry is now worth $ 9 BILLION!

Written by  mevotex
Fresh water has always been a precious resource to Singapore. Being a tiny island with high urban population constrained by its land size, modern Singapore never have enough water of its own to support its population, but this is about to change....
In 1927, Singapore signed a water agreement with Johor to construct a pipeline transporting raw water from Johor to Singapore. During the Battle of Singapore in 1942, the pipeline was destroyed, which left Singapore with water reserves that could last at most two weeks. According to Lee Kuan Yew, this was one of his motives to envision water self-sufficiency for Singapore later when he became the city-state's Prime Minister.
Immediately after the British awarded self-governance in 1959, the Singaporean government under Lee signed 2 water agreements with Malaya in 1961 and 1962. Under these agreements, Singapore will build two water treatment plants in Singapore and a new, expanded pipeline from Johor at its expenses. Singapore will also supply treated water to Johor at far below the cost of treating the water, and in return, Malaya would also supply raw water to Singapore below market prices. The agreements would last till 2011 and 2061 respectively.
In 1965, when Singapore was expelled from the Malaysian Federation, it received the first water threat from then Malaysian Prime Minister Tunku Abdul Rahman, who said that "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".
Mahathir tried to take advantage
In response, Singapore began to construct more water schemes on the island throughout the 1970s. This include the damming of river estuaries to allow for greater storage volumes, which resulted in larger artificial reservoirs that collect water from carefully managed catchment areas. These reservoirs would later be responsible for 20% of Singapore's water needs in 2012.
But as Singapore began to rapidly industrialize, the amount became insufficient. Thus in 1982 the city-state was interested to build a dam on the Johor River in Malaysia and an associated new water treatment plant there, with the construction costs all paid by Singapore, in exchange, Malaysia was to allow Singapore to purchase more than the 250 million gallons of water per day as negotiated in the 1962 agreement.
Malaysia's Prime Minister Mahathir Mohammad however, decided to make it difficult for Singapore. After six years of difficult negotiations, the 2 countries finally signed the agreement that allowed the construction of the dam. It was a heavy price for Singapore, who agreed to pay RM320 million as compensation for the permanent loss of use of the land and its associated revenue, a premium of RM18,000 per hectare of land, and an annual rent of RM30 for every 1,000 square foot of the land. The cost of building and maintaining the dam would be borne by Singapore, and upon the expiration of water deals, both the dam and the treatment plant are to be returned to Malaysia.
Mahathir believed that Singapore couldn't survive without Malaysia's water
Emboldened by this victory, Mahathir mistakenly believed that he had caught Singapore's main weakness. In 2000, attempts to re-negotiate with Malaysia to secure water supply beyond 2061 failed, and in 2003, Malaysia again warned Singapore that once the first treaty expired in 2011, the water prices would be raised by 200 times from 3 sen per 1,000 gallons to RM6.25. The government of Singapore decided that, instead of paying a higher price and continue its water dependence on Johor, it will go all-out to achieve water-sufficiency.
But Kuan Yew said NO!
The first thing Singapore did was to invest heavily in water technologies and gathered the world's most renowned water management scientists into the island. Academics, researchers, scientists and experts from across the globe were invited to Singapore to help it devise a water solution. Desalination and recycled water were identified. Utilizing advanced technologies, Singapore proceed to construct one of the world's largest desalination plant in 2005, now accounted for 10% of the country's water needs. Singapore's second plant, even bigger, is scheduled to complete in 2013, providing another 10%.
Desalination removes salt and other minerals from sea, turning sea water into fresh water. There is almost no controversy on this. The issues come when dealing with recycled water. By that it means waste water, including those from toilets and drains, is to be purified back for use. The concerns lay on whether all harmful materials, pathogens or micro-organisms could be effectively removed.
Lee Kuan Yew Water Prize was established to award $300,000 for scientists of any nationalities who made breakthrough in water treatment technologies and brought them to Singapore. In 2003, Singapore started its first wastewater recycling plant. Under constant advices and supervision from scientists and researchers, by 2012, the country's 5 wastewater plants successfully marketed themselves and provide enough clean water to meet 30% of the island's needs.
‘Public acceptance is not guaranteed at the start. Recycled water has been rejected in Australia, where people term it ‘yuck’ water,’ said Dr Eduardo Araral, assistant dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore. ‘Singaporeans accepted it both because they are pragmatic and because they trust the Government’s promise that it is safe to drink,’ he added.
In 2006, Singapore identified the commercial value of water and environmental technologies, especially to water-scarce Middle East, North Africa and various First World nations, and also countries who currently lack proper and effective water treatment system. The government invested an initial $330 million to promote the new industry and to make Singapore a potential global hub for water research and development. Since 2008, the city-state hosts the Singapore International Water Week, a key event for the global water industry, every year.
Water sufficiency to exceed 70%
Over the years, Singapore has turned what used to be a scarcity into its strength and now the water industry is seen as a new growth sector for the country. The government's commitment to industrial promotion, easy access to research funds, and readily available talents, help built up a new robust water industries in Singapore amid the European financial crisis.
Kow Juan Tiang, group director for Environment & Infrastructure Solutions at IE Singapore, said: “If you look at the water industries in Singapore, it encompasses companies from many countries. Our financial sector worked closely with those companies venturing overseas here for projects to secure technology, solution, and most importantly, money financing, at a competitive advantage compared to otherwise in (crisis-laden) Europe.”
Goh Chee Kiong, director of Cleantech Building & Infrastructure Solutions at Economic Development Board, said: “What is helping this sector is the fact that Singapore has a vibrant manufacturing industry comprising chemicals, pharmaceuticals, semiconductor, oil and gas, and they are becoming prove points and demonstration sites for water companies to utilize their technology in Singapore before scaling up to the rest of the world.”
The push to develop the industry has drawn attention from some of the world's largest companies like General Electric and Siemens, who invested and created local water companies such as Hyflux that have expanded overseas. "What they are looking to do is create a virtual market for the water business which is much larger than Singapore," said Mr Glen Daigger, chief technology officer of CH2M Hill, an US-based industry consulting firm. "Singapore's ambition to become a water technologies hub in Asia is now a step closer."
With technology as the key driver, the water industries in Singapore experienced strong growth. In just five years, Singapore was propelled from a water-challenged nation to an internationally-recognised name in the global water community - with its water industry blossomed to over 100 companies. The city-state successfully built up a vibrant water industry cluster, with operations which span the value chain, including R&D centres, equipment suppliers, system integrators and EPC firms, project developers and financing organizations.
In 2011, Singapore's water sufficiency rose to 60%. At the same time the 1961 water agreement with Malaysia expired. Singapore informed Johor it would not be renewing the agreement. The next focus would be on total self-sufficiency before 2061, the date when the second agreement lapsed.
Singapore's water sufficiency to top 70% next year, on track for self-sufficient in 2061


Singapore government is pragmatic,BN more of slogan shouting, NATO...

Remind me of Lee Kuan Yew laughing at wrong immigration policy...
This comment has been removed by the author.
Why Singapore F1 GP attracts more attention than Sepang F1 GP?

Why Singapore has lower corruption index than Malaysia?

Why people think that Singapore is cleaner than Malaysia?

Why people think Singapore is more developed even though Singapore has no building taller than Petronas Twin Tower, has no astronaut, and has no national car?

Why Singapore has comfortable and seamless transfer between bus interchange and MRT station but not Malaysia's?

Why bus and train information (bus service route and bus arrival times updated every minute) is accessible via mobile phone in Singapore and not in Malaysia?

Why Top university in Singapore is ranked higher than the top university in Malaysia?

Why is Singapore Dollar much stronger than Ringgit Malaysia even though the Ringgit Malaysia was stronger few decades back?

Why Changi Airport has higher traffic movement compared to KLIA even though Malaysia has much greater population than Singapore?

Why Singapore having higher GDP/ capita? And recently Singapore's GDP has surpassed Malaysia even though her population is only one fifth of Malaysia's?

Why authorities in Singapore are more efficient than Malaysia's?

Why Singapore has greater ease of doing business than Malaysia?

Why Singapore has better public transport than Malaysia?

Why the procurement of Singapore government contracts can be done so transparent but not in Malaysia?

Why Singapore has higher computer ownership (per capita) than Malaysia?

Why Singapore has greater current account surplus than Malaysia?

Why Singapore has higher purchasing power than Malaysia?

Why Singapore national football team has higher ranking than Malaysia?

Why Singapore has better economic freedom ranking than Malaysia?

Why Singapore has higher internet penetration (% population) than Malaysia?

Why Singapore has better city infrastructure than Malaysia?

Why Singapore has lower murders (per capita) than Malaysia?

Why highway users in Singapore do not have to queue, slowdown/stop to pay toll charges?

Why Singapore has higher global peace index than Malaysia?

Why Singaporeans have greater life expectancy rate than Malaysians?

Why Singapore has higher human development index than Malaysia?

Why Singapore has higher literacy than Malaysia?

Why Singapore has better business travel ranking than Malaysia?

Why Singapore has greater political stability than Malaysia?

Why Singaporeans are richer even though Malaysia is blessed with natural-resources?
clk said…
the agreement allowed s'pore to buy time and with technologies and brain power combined, the 50 years and 100 years provides them with that opportunity. a time frame merely provides a target to completion. unlike some policies in m'sian which despite a time frame continues forever.
staind said…
Singapore did a good job in bringing up their water industry. however, the author sounds cynic and biased (dali i know the author is not you).

like LKY who believes Singapore should not rely on Johor for water, Mahathir was simply acting for Malaysia' national interest. why should Johor continues the 1961 water deal when it due in 2011 when Johor was selling raw water at 3 cents/1000gal to Singapore while buying back treated water from Singapore at 50cents/1000gal.

Some may argue that the huge price difference was because Singapore was paying for all costs like infrastructure, transportation, piping, etc. However, bear in mind that Singapore had already taken into consideration of all those costs when they signed the deal in 1961. hence, when the deal expired 50 years later in 2011, their investment had already been returned. On Malaysia's perspective, the rate should be revised as it was a 50 years old agreement. furthermore, those rivers (sg tebrau, sg skudai) needs rehabilitated which will be borne by Malaysia.

therefore, to say singapore's water industry is all thanks to Mahathir is simply not right. Mahathir was thinking of national interest, that's all. The author should see this in term of business perspective.

Imagine that you yourselves is having a tenant which your parents signed an agreement of no rent raise for 10 years due to he was involved and paying some of the cost of your house's construction. As such, your parent let him stay almost for free with little rent for 10 year. at the 10th year, your house needs more maintenance and you want a rent raise when revising your new contract. however, your tenant wouldn't budge. what would you do?
ronnie said…
Staind makes a sound and compelling argument. Thumbs up for the Tun.
ryeshin said…
very well said staind. singapore was just acting like how it should act when in desperation with a little bit of foresight.

ryeshin said…
very well said staind. singapore was just acting like how it should act when in times of desperation with a little bit of foresight.
Ciki said…
Singapore is pragmatic and visionary. Malaysia is the total opposite.

See how Singapore open up and accept companies from world over based on merit, and thus allowed innovation and ideas to enable it to solve problems efficiently and quickly.

In Singapore it's how to be better for a better tomorrow. Here it's how to stuff more money into the politicians and co.'s pockets and con the people!!
Ciki said…
This comment has been removed by the author.
Travelkaki said…
Why the pride from Singapore? If not for Malaysia since independence, the lack of water would have choked off Singapore decades ago.

They remind me of a child who was put through university by his parents and now that he has found a high paying job, turns around and tells his parents "I am independent now, so long suckers!"

Come on lar Singapore, show some "Asian values" like gratitude please!
William Wang said…
Malaysia has the natural resource, water, which Singapore lacks, we could have sold them to Singapore at competitive price. Obviously, our negotiators may be too greedy or dump that prompted them to use an alternative which may be equivalently expensive but with better safeguard. Now we can only watch this water flows into the sea. We had seen in many occassions our leaders make foolish decisions, out of pride or arrogance. There is such thing as competitive advantage, we dont grow soya-beans here just to aim for self sufficiency or compete. Same as in USA they dont grow Oil-Palm. Even buying back at 50 sens/1000gals is very-very cheap, This 1000gals is worth almost Rm5 in Malaysia terms, yet most Malaysia water utility under BN lost money and wanted to increase the rate. Another clear example is national car, it is a disaster whichever way you want to see it. Thailand open the car industry to all major car producers, there production is much higher than Malaysia now and thus employment opportunity as well.
Pawan Kumar said…
Singapore’s water industry continued its growth momentum in 2011 with investments which will add S$130 million of annual value add and generate 460 jobs when fully realized.
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