PUTRAJAYA: Malaysia and Singapore will consider arbitration as a way to resolve the long-standing water issue affecting both countries.
Prime Minister Tun Dr Mahathir Mohamad said that this would be mulled by both sides as they seek to carry out a review of the 1962 Johore River Water Agreement.
He said it was in the best interest of both countries to move along the discussions for the review.
"Malaysia and Singapore have obligations under the 1962 Johore River Water Agreement.
"For Malaysia, resolving the longstanding issue of water price review is a priority. We were engaged in active negotiations on the review in the late 90s and early 2000.
"Prime Minister Lee and I agreed to find amicable solution through arbitration on a mutually agreed basis," Dr Mahathir said in a joint press conference with his Singaporean counterpart Lee Hsien Loong after the 9th Malaysia-Singapore Leaders' Retreat in the Prime Minister's Office here.
A joint statement issued by both leaders said that they noted the differing opinions of both sides on the right to review the price of water under the 1962 agreement.
"Both Leaders agreed for the Attorneys-General of both sides to discuss these differing positions. Both sides will seek amicable solutions, including the possibility of dispute resolution through arbitration on a mutually agreed basis," said the statement.
Dr Mahathir has repeatedly said before that Malaysia was selling water to Singapore at too low a price and that it should be raised.
Under the agreement, which will expire in 2061, Singapore may draw 250 million gallons of raw water from Sungai Johor daily at 3 sen per 1,000 gallons.
In return, Johor is entitled to receive a daily supply of up to five million gallons of treated water, or two per cent of the water supplied to Singapore, at 50 sen per 1,000 gallons.
When talking about the same issue, Lee, reiterated his stand that Singapore regards the agreement as one of the fundamentals of ties between both countries.
"This water agreement was reached by the two water authorities; Public Utilities Board on the Singapore side and in those days, it was the Johor Water Department, which has now become the Bakaj (Johor Water Regulatory Body), in 1962. It was subsequently guaranteed by the two governments at federal level, and in Singapore at national level in 1965 in the separation agreement.
"It is a fundamental founding document for us (Singapore), so we have to go according to this document."
Lee said that past prime ministers of Singapore and Malaysia had engaged in similar discussions but without any outcome.
"The first (Singapore) prime minister abided by it. The second prime minister negotiated the package deal with Malaysia but in the end , there was no final agreement and the water price (remained).
"I hope that Dr Mahathir will be able to see Singapore's perspective on why this is such a sacrosanct item. Let us try to find a way forward which enables us to talk constructively about this issue, and hopefully be able to make some progress.
"It is a basic term on which the two countries decided to manage our relationship. If you look at it at that point of view, to be able to change it will be a very high hurdle," said Lee.
Lee said it was premature at this stage to put a reviewed price for raw water to be sold to Singapore and the price of treated water to be sold back to Malaysia as discussions on the review were still being negotiated by both sides.
"The ministers will need to talk (on this issues), but to ask me what is the reasonable price for water now is to prejudge the question," said Lee.
He said Singapore was concerned with pollution issues at water catchment areas on Johor's side and it seriously viewed the sustainability of some of water resources in the state.
"Just last week, the PUB (Public Utilities Board) water works in Kota Tinggi had to shut down due to high levels of ammonia which was traced to palm oil mill in Sedenak.
"If the Johor River (Sungai Johor) suffers like what happened to Sungai Kim Kim, I think it could be disastrous for both countries," said Lee.