Singapore to raise water price by 30% over two years, Business News

PUBLISHED ONFebruary 21, 2017 4:33 AMByAndrea Soh

Water prices in Singapore will be raised by 30 per cent over two years.

And to encourage water conservation among non-domestic consumers, the Water Conservation Tax will now also be imposed on NEWater.

The price hike will be made in two steps, on July 1 this year and next year.

The increase will amount to less than S$25 a month for three quarters of businesses in Singapore, said Finance Minister Heng Swee Keat during his Budget speech.

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"We have priced water to reflect the higher costs of desalination and NEWater production because every additional drop of water has to come from these two sources," he said.

"The cost of water production and transmission has increased as we build more desalination and NEWater plants, and lay deeper pipes through an urbanised environment."

At the same time, operational costs - including those for manpower, materials and chemicals - have also gone up, said national water agency PUB.

While it has been managing costs over the years by improving technology and productivity, much of the incremental improvements have been reaped.

"What remain are longer-term technological breakthroughs, which may take years to be proven operationally and become employable," it said.

Singapore last raised water prices in 2000, when water demand amounted to 300 million gallons a day (mgd).

This has since risen to 430 mgd.

The increase in demand has been met by building new plants, upgrading existing ones and expanding the potable and used water networks, said PUB.

The government agency will double its investment in water infrastructure to about S$4 billion in total in the next five years.

For non-domestic consumers and domestic users consuming less than 40,000 cubic metres a year, the water tariff for potable water will be raised from S$1.17 per cubic metre now to S$1.21 per cubic metre from July 1, 2018; the Water Conservation Tax will also be raised from 30 per cent to 50 per cent.

PUB is restructuring used-water charges by combining the Sanitary Appliance Fee and Waterborne Fee - for treating used water and maintaining the used water network respectively - into a single, volume-based fee.

Taking into account the increase in water tariff, Water Conservation Tax and used-water charges, the total water price will rise from S$2.15 per cubic metre to S$2.74 per cubic metre for non-domestic users.

Starting from July 1, the Water Conservation Tax will be levied on NEWater, at 10 per cent of the NEWater tariff.

With the new tax and the increase in the waterborne fee, the total NEWater price will rise from S$1.78 per cubic metre to S$2.33.

Property developer City Development Limited said its existing water-efficient initiatives will mitigate the water tariff increase and minimise the impact of additional costs.

Its chief sustainability officer Esther An said: "We are cognisant of the scarcity of water in Singapore and the need for judicious use.

"We hope that there will be measures or funding that could help businesses reduce overall operating costs and remain competitive."

Amendment note: In an earlier version of the article it was stated that the water tariff will be raised from S$1.17 to S$1.21 for domestic users consuming less than 40,000 cubic meters a year. This has been corrected to show that it refers to domestic users consuming less than 40 cubic metres a month.

HIGHLIGHTS

Water prices to be raised in two steps
The hike will be across water tariff, water conservation tax and used water charges
The increase will be less than S$25 a month for most businesses
For more Budget 2017 stories visit bt.sg/budget17

sandrea@sph.com.sg

This article was first published on February 21, 2017.
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Budget 2017