Mr Speaker, Sir, when the Prime Minister recently highlighted the water issue as an example of some of the key challenges facing Singapore, it struck a chord with the Singapore public. Many members of the public and MPs have since spoken out in support of the increase of 5% points in the water conservation tax announced by Dr Richard Hu in his Budget Statement. Some have expressed concern over the availability of water supply to meet our long-term needs and suggested that the Government look into alternative supplies of water. Some proposed that recycled water from our sewerage treatment works be used for toilet flushing. Others have stressed the need to create greater awareness amongst the public on the need to save water and to make water conservation a way of life. Today, Dr Ow Chin Hock and several MPs have also made various suggestions, as well as asked some questions about our water supply and usage. I would like to take this opportunity to give Members a clearer picture of the water situation, and respond to some of the points raised by the public and by Members. Water Supply First, let me explain to Members the maximum amount of water available to Singapore from the present sources and under the existing Water Agreements. We have two agreements with Malaysia. The first agreement, the 1961 Water Agreement, gives us about 86 million gallons of water a day (or mgd), and will expire in the year 2011. The second agreement, the 1962 Water Agreement, entitles us to 250 mgd, and the Agreement will expire in the year 2061. So we have a maximum of 336 mgd until the year 2011, and after that, if the 1961 Agreement is not renewed, only about 250 mgd from the Johor sources. The reservoirs and catchment areas in Singapore supply about 100 mgd, and after the year 2011, this means that all our present sources of water, both in Singapore and Johor, will only give us 350 mgd. And that is our limit. Seriousness of our water situation Next, what about our consumption trends? Our water consumption has been growing steadily over the last 10 years. From 1985 to 1990, consumption grew at about 3.3% per year. However, consumption grew rapidly after that, especially in the last four years, averaging about 5.2% per year. While such a rate is already not sustainable, what is even more worrying is that in 1994, we recorded a significant increase of 6.5% in our consumption rate. In 1994, Singapore consumed 260 mgd. Sir, if we continue to use 6% more water each year, we will run short of water in six years' time, ie, by the year 2001. But let us suppose that through rigorous water conservation measures, we succeed in reducing the growth in water consumption to half, ie, to 3% per annum, which is half the rate in recent years. Our water consumption will still reach 350 mgd a day by the year 2009, ie, before the 1961 Water Agreement expires. Sir, I was reassured to read the Mentri Besar of Johor saying recently that Johor will continue to supply water to Singapore as long as it can. But Singapore cannot afford to take chances with something as vital as water. We must do everything in our power to ensure that our limited water supply is used prudently and never wastefully. We therefore need to take immediate steps to reduce our water usage. Sir, I would like to request the Clerk of Parliament to hand out a Table (Cols. 241 - 242) which I have prepared. [Copies of table distributed to hon. Members.] Table - COMPARISON OF WATER PRICES (Cols. 241 - 242) Sir, at the same time, the Government is also actively exploring alternative sources of water. However, I must warn Members that any possible new supplies will be many, many times more expensive than current sources, as heavy investments will be needed. Furthermore, by international standards, Singapore's water rates are still quite low. Members can refer to the Table which has just been given out. If you look at the explanation below, for the first block of water consumption, we are charging S$0.59 per cubic metre for the first 20 cubic metres of water used per month. That places us just above Norway and Canada, ie, we are the third lowest of all the developed countries. And even if we include the second block of another 20 cubic metres, that will place us at about S$0.74, which still places us fourth from the bottom. So for the quality of water that we are supplying, this price is very low. It is, therefore, inevitable that the Government's water conservation tax and PUB's water rates must go up substantially over the next few years. The price of water in Singapore must reflect the true scarcity of this precious resource. The cost of water is not just the cost of collecting the rainwater from the sky in reservoirs, processing it, and piping it to the customers. It is the cost of getting additional water after rainwater runs short, when we must either pump water from long distances away in Indonesia, or desalinate sea water to get fresh water. This will cost five to eight times as much as rainwater. Water Conservation Campaign Sir, let me go on to touch on the measures which we are reviewing to restrain water consumption. The PUB will emphasize public education in order to encourage Singaporeans to conserve water. As Dr Ow Chin Hock had pointed out, the previous save water campaigns were able to restrain growth of water consumption. The PUB will launch a fresh series of annual Save Water campaigns, starting in June this year, to coincide with our drier months. The campaign will focus primarily on domestic consumers, as domestic water consumption accounts for over half of our total water consumption. As part of the campaign, PUB will also hold neighbourhood water-rationing exercises. This will help drive home the message that if we do not make saving water a constant habit, water-rationing, with all its attendant inconveniences, may one day be a way of life. In addition, the PUB will hold exhibitions and other educational programmes on a regular basis throughout the year as and when an appropriate occasion presents itself. The PUB will also be reaching out to the non-domestic water users, most of whom are in the manufacturing and commerce sectors. This will not be a new activity for PUB. PUB already routinely identifies major non-domestic water users, and helps them to reduce their water usage. The PUB also vets new projects that are significant water users, and ensures that they incorporate water conservation measures. I am glad that some major companies have already taken concrete steps to reduce their water usage. One good example is Shell, which has built its own desalination plant, and is now almost self-sufficient with regard to water. As a result of PUB's on-going efforts, our overall non-domestic water consumption has been growing more slowly than our GDP for the past three years. In 1994, the manufacturing sector grew by almost 13% while its water usage increased by only 8.6%. The corresponding figures for the commerce sector are 9% and 3.7% respectively. This is encouraging but, nonetheless, we must improve further. Hence, the PUB will enlarge its outreach programme for non-domestic water users, and explore new ways to help them conserve water. Water Conservation Tax Sir, the water conservation tax is another key measure to encourage the prudent use of water. While the public education programme highlights the importance of saving water, the conservation tax links the message to the actual usage. It reminds Singaporeans every month when they receive their utilities bill that water is precious, and that there is a cost to its usage. As announced by the Finance Minister, with effect from 1st April 1995, the water conservation tax will be increased by 5 percentage points to 15% for domestic consumers, and to 20% for non-domestic consumers. As the new water supplies will cost many times more, we will need to progressively increase the water conservation tax to better reflect the true scarcity value of water in Singapore. Recycling Waste Water Sir, there have been suggestions that we look into the use of industrial water for toilet flushing, which accounts for about 20% of our domestic water consumption. Industrial water, which is recycled water from the sewage treatment plants, can be a significant source of water for us, as a large proportion of the water we consume every day eventually is discharged into our sewers. Currently, the Ministry of the Environment recycles some of this water into industrial water, which is used by industries for cooling, washing and process applications. I would like to inform Members that the PUB is looking into the wider use of industrial water, including for the flushing of toilets. Sir, while we try to curb the demand for water, the Government is also actively exploring the development of new and alternative water sources, to meet our future needs. Limited Additional Local Sources One possibility is to increase our local sources of water. We can build more reservoirs, for example, by damming up the sea between Singapore and Pulau Ubin, but the constraint is not reservoirs. The constraint is catchment areas. Already 50% of Singapore is catchment area. Besides catchment areas, like Mandai or the Western catchments, we also collect rainwater from the cleaner urban and less industrialised areas. This includes some of our housing areas. The rest of our land cannot be used as catchment areas, either because it is too built up, or too densely populated, or includes pollutive industrial activities. Overseas Sources of Water Another possibility is additional overseas sources. We signed an Umbrella Agreement with Indonesia in 1991 to jointly develop water resources in the Riaus for use by both Singapore and Indonesia. Under the Agreement, Singapore can draw up to 1,000 mgd of raw water from the Riau Province. However, individual projects have to be carefully evaluated, to make sure that they are technically feasible and commercially viable, because they will require massive investments - at least several hundred million dollars per project. The first project is the development of catchment areas on Pulau Bintan. This is presently in its preliminary stages. There is also a long term possibility of drawing water from Kampar River in the Riau Mainland on Sumatra. The potential supply from Kampar is huge, but because of the long distances, by the time the water is brought to Singapore, the cost per cubic metre will be very high, perhaps five to eight times the current cost of PUB water. Desalination We are also looking into desalting - desalination or reverse osmosis to turn salt water into fresh water. Desalting is expensive, but from the technical point of view it is entirely feasible as a supplementary source of potable water. Being an energy intensive process, the cost of desalted water will go up if oil prices increase. Based on the current cost of about US$20 per barrel, the cost of desalinated water will be about seven to eight times the current cost of treated water. The URA and the PUB have already reserved land for desalination plants in Singapore. A study team from the PUB and my Ministry will be visiting several countries with on-going large-scale desalination operations to study their experience. Depending on the conclusions of the study, PUB plans to build a pilot desalting plant in Singapore. This way, PUB will gain experience operating desalting plants, so that should the need arise, we will be able to fall back on this source of water. Sir, let me now respond to some of the points raised by Members. Dr Ow Chin Hock expressed concerns about the impact of the increase in the water conservation tax on low-income households, particularly those with large families. About 80% of households living in HDB rental flats and 60% of 3-roomers use less than 20 cubic metres of water per month. The fact is that water charges are low. The bill for using 20 cubic metres of water is only $11.
20. Families using double that amount, ie, 40 cubic metres of water, pay $28.80 a month. Their conservation tax will increase by 80 cents under the 5 percentage point increase announced by Dr Hu. Only about 3% of HDB rental households and 6% of 3-roomers consume more than 40 cubic metres of water a month. The question is whether for low-income families with large families, could we have a threshold system based on a per capita basis. While such a system is possible, it would be costly and difficult to implement and to operate. Why? Because some of the problems would be that PUB must then keep track of the number of people residing at a particular address and update their records all the time. PUB will also need to keep track of births and deaths, marriages and movement of people in and out of each household. Implementing such a system will definitely be very expensive, and the costs will ultimately have to be paid by the consumers in the form of higher tariffs. Logically, there is no reason to have a 20 cubic metre threshold. Since water is precious, in principle, the water conservation tax should apply to every drop of water that we use. This would also resolve the anomaly of big families being discriminated against on the 20 cubic metre threshold quantum. The Government will not change the system at the moment, but will keep the question of the appropriate threshold for the water conservation tax in mind when it reviews water rates and taxes every year. There have been other suggestions, eg, the use of underground caverns to store water. I would like to assure this House that the PUB will be looking into all suggestions and exploring all possibilities for reducing water consumption and increasing the supply of water. We will consider again proposals which were not viable in the past but which may now be viable. We will explore possibilities which are not viable now, but which in future may be viable. Sir, a secure water supply is a major long-term challenge for Singapore. Over the years, the Government and the PUB have taken decisive actions to develop domestic water sources to the limit, to meet the growing needs of the economy, and to promote water conservation. Through a combination of these measures, we have up to now been able to postpone the day when demand for water exceeds supply of water. But this approach is reaching its limits, because our traditional sources of water cannot increase much further to meet our needs, which continue to grow. In fact, in the year 2011, when the 1961 Water Agreement expires, the supply will shrink. This is why water is always a matter of utmost seriousness to us. Hence, the Government is developing alternative water sources in Indonesia, and is now actively exploring desalting as an important supplementary source of potable water. There is no question that we will solve the water problem. Even if we have to desalt every drop of water that we drink or cook with, as countries do in the Middle East, we can do so. It will cost us a lot of money, but it will not bankrupt us. Fortunately, we do not have to do this, as we still have other sources available. The Government needs the close cooperation of all Singaporeans to tackle this challenge. Every Singaporean must do his or her part to control water consumption. Water is a scarce resource. We must therefore make water conservation a way of life. By planning well ahead, by boldly taking the necessary tough decisions, we will ensure that all Singaporeans will have adequate water to maintain our quality of life for many years to come.