Water sold 550 times more to S’poreans than the 17 times to Malaysia?

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June 25, 2018

Are we selling water to Singaporeans and Malaysia at 550 and 17 times more, respectively?

I refer to the article “Can PUB explain how we’re charged 550 times more after buying water from M’sia at 3 sen per 1,000 gallons?” (theonlinecitizen, Jun 25).

It states that “So, it appears that PUB is buying water from Malaysia, under the 1962 water agreement, at 3 Malaysian sen per 1,000 (imperial) gallons or 3 Malaysian sen per 4.55 cubic meter. Converting to S$, this would translate to S$0.01 for 4.55 cubic meter, or S$0.0022 per cubic meter.

To summarize, PUB buys water from Malaysia at S$0.0022 per cubic meter and sells to Singaporean households 550 times more at S$1.21 per cubic meter (using the $1.21 rate, even excluding Water Conservation Tax and the Waterborne Fee).

Can PUB give Singaporeans a breakdown how consumers are being charged 550 times more after buying from Malaysia only at S$0.0022 per cubic meter?”

As to “The remaining 1962 accord, which expires in 2061, gives Singapore 250 million gallons of raw water daily at 3 Malaysian sen per 1,000 gallons, and Malaysia buys back a portion of that at 50 Malaysian sen per 1,000 gallons” – does it mean that we are selling water back to Malaysia at about 17 times (50 divided by 3 sen)?

If this is the case – why are we selling back to Malaysia at 17 times, compared to 550 times to Singaporeans?

No costs, revenues, profits?

In this connection, what are the historical costs, revenues and profits/losses, and the future projections for selling water to Singaporeans?

Try to estimate?

Let me attempt to do some estimates.

The PUB’s profits for the last financial year was $167 million.

The Water Conservation Tax for the last financial year was $192 million.

GST is estimated to be $44.8 million (7% divided by 30% x $192 million).

The estimated income tax transferred to the Government on the PUB’s profits was $34 million ($167 million divided by 0.83 (17% tax rate) – $167 million).

The total for the above four items works out to $438 million.

$438m cash inflows – profits?

So, does it mean that the cash inflows from water are about $438 million for the last year?

Projected future cashflows? 

With the increase in the price of water by at least 30 per cent – what are the projected figures in the future?

Leong Sze Hian

 

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About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.