No sign of deal in Malaysia-Singapore water talks

October 16, 2002

Water price to be backdated STAR

THERE was no sign of a deal on Wednesday, Oct 16, as officials from Malaysia and neighbouring Singapore ended a first day of talks over the thorny issue of raw and processed water.

The two are at odds over how much Singapore should pay its neighbour for water, a key issue being taken up at a two-day bilateral meeting in the southern Malaysian city of Johor Baru.

"We will still be meeting tomorrow," an official at the talks told Reuters, though he declined to be identified by name or country.

Singapore has said it is willing to pay more for the raw water it buys from Malaysia, but wants any rise based on an agreed formula accounting for the processed water it sends back.

It pays three Malaysian cents (0.85 cents) for every 1000 gallons of raw water it gets from Malaysia's southern Johor state, a figure Kuala Lumpur initially said it wanted to raise 100-fold though it has since revised the offer.

Malaysia is contracted to pipe 350 million gallons (1.6 billion litres) of water each day to the city state under two deals signed in the early 1960s.

The two countries, which separated in 1965 after a brief union following independence from Britain, are close trading partners who occasionally engage in fierce disputes.

Malaysian Foreign Minister Syed Hamid Albar warned Singapore it had better come to the table with some serious offers.

"We are giving them one more chance," Syed Hamid said at the weekend, suggesting the matter would be taken to an international court of arbitration.

Singapore's Ministry of Foreign Affairs issued a sharply worded rejoinder on Tuesday, saying Singapore would see Malaysia in court if that is what Kuala Lumpur wanted.

Talks are also stalled on the use of Malaysian airspace by Singaporean jet fighters, treatment of Malaysians' pensions held by Singapore and the replacement of a causeway with a bridge.