Technology still costlier
I REFER to the report on Tuesday, 'Singapore firms score big with water tech deals'.
We may be pleased with the progress we have made - and continue to make - with waste-water reclamation and desalination, which enable us to reduce if not eliminate our dependence on rainfall and imported water. However, we should not lose sight of the fact that obtaining potable water from waste water or sea water is more costly than by conventional means, because of the extensive use of membranes and the energy intensity of the purification processes.
However, we need not incur this higher cost, at least for part of our water consumption. As long as the reservoirs in Johor collect more than enough water to satisfy Johor's own needs, and with our entitlement under existing water agreements, it probably makes more economic and environmental sense for both countries if we buy such surplus water from Malaysia. This will be particularly so when the 1961 water agreement expires in 2011, freeing 86 million gallons per day that Malaysia is obliged to supply to us until then.
Of course, both parties must be willing and the price must be right. The price needs to be lower than the lowest variable cost of producing our own water to a comparable level of purity by reclamation or desalination.
The price can be much lower if the quantity offered to us is not fixed over an extended period, but is allowed to vary from time to time, so it is really water that is surplus to Johor's needs.
We benefit from a lower cost of water and Malaysia benefits from realising some monetary value for a commodity it cannot harvest at the moment. It will not affect our overall trade balance, but it will improve Malaysia's. It will also reduce the impact on the environment.
This does not mean we should revert to being dependent, even partially, on imported water. We should, and must, continue to develop the infrastructure to reclaim and/or desalinate water, but we may want to use these facilities only to the extent that we cannot get imported water at a meaningfully lower cost than the variable cost of doing so ourselves.
[Argued rationally. But there is too much historical baggage and emotions stirred up for us to go back that way. Malaysia begrudged us water for many reasons. The Wafer fab industry is one reason. This industry is water-intensive. In this M'sia is in competition with us. Selling us water that would be used by an industry that is competing with M'sia doesn't make sense to the Malaysians.
Mahathir has done his fair share of whipping up sentiments in M'sia against Singapore. In the foreseeable future, there will still be a lot of baggage or legacy issues that cannot be resolved. This is water under the (crooked) bridge. There is no point revisiting this until M'sia gets over it's superiority/inferiority complex.
Letters like this to the forum page just show how naive (and to an extent arrogant) Singaporeans can be. This ranks just under the "Let's buy Batam from Indonesia so Singapore can be bigger" idea in terms of sheer political naivete.]