ESTIMATED EXPENDITURE FOR DEVELOPMENT OF SCUDAI RIVER SCHEME

Mr David Marshall asked the Prime Minister what is the estimated expenditure of the part of the Singapore Government for the development of the Scudai River Scheme.

The Prime Minister: The estimated expenditure for the development of the Scudai River scheme to provide for the collection, storage of water, treatment, pumping to quarters, site, buildings and pipelines is estimated at $11 million. But at the same time, co-related to this extension, there will have to be a 15 million gallon storage reservoir in Singapore with distribution pipelines which will cost a further $9 million.

Mr Rajah: Is the Prime Minister himself satisfied whether, in view of the fact that we are going to the Johore River for our eventual water supply, this $26 million that is going to be spent on the Scudai River will not eventually turn out to be a waste of public money?

The Prime Minister: It is $9 million, making in all $20 million to provide for 15 million gallons of storage space in Singapore for the water to be pumped in. That is one of those questions which I am unable personally to satisfy myself on, because, much as I would like to be able to, I am really unable to say from my own knowledge how these things are done. But the engineers have assured me - I have to take their advice, and I am reasonably satisfied - that the best thing we can do is to take the advice that has been tendered to proceed with this. I might add that this is a matter which is contentious between Singapore and Johore, that the moment the Johore River project is completed the Johore Government wants to buy over our best reservoirs in Pontian and Gunong Pulai, where the water is soft and sweet and the treatment costs little, as distinct from Tebrau where a considerable amount of treatment is required. So I would rather not get involved in the intricacies of the argument on both sides. All I can say is that we have been extremely fortunate in that, despite pressure from certain members of the Johore State Assembly to buck the price up, taking advantage of the drought and the negotiations going on in the course of the drought, the State Secretary and the Mentri Besar have resisted the temptation to do so. They have only insisted on the 1955 agreement. I think the Member for Farrer Park will remember this because he was in the Municipality then in 1955 when these new rates were agreed. The old rates were 25 cents per gallon. There were no royalties. Singapore supplied Johore at 25 cents, and they sold to their consumers at whatever profit they could make, and everybody was happy. Then the cost of treating the water went up, because instead of collecting water in convenient catchment areas like Kota Tinggi and Gunong Pulai, we had to tap Tebrau, and now Scudai, and later on the Johore River. It has gone up to 50 cents. In 1955, the Municipality came to an agreement - well, the Johore Government insisted that it was an agreement; our contention is that it was only a preliminary agreement - that the cost of water supplied to Johore should be brought up to date, namely, 50 cents.

Mr Speaker: Order. Would the Prime Minister think it convenient then to answer questions 14* and 15+ at the same time?

The questions standing in the name of Mr David Marshall read as follows:-

• 14. To ask the Prime Minister (a) what is the total payment to be made to the Johore Government for water supplied from Tebrau water works from 1955 to 30th September, 1961, at the new rates; (b) what is the estimated payment to be made to the Johore Government for the supply of water to Singapore in 1962 at the new rates; and (c) whether he is aware of any expenditure involved on the part of the Johore Government for providing such supply.

• 15. To ask the Prime Minister (a) what is the estimated payment to be made by the Johore Government to Singapore for water supplied by Singapore for the year 1962 at the new rates; and the estimated cost thereof to Singapore; and (b) the reasons for increasing the rate from 25 cents to 50 cents per thousand gallons of filtered water.

The Prime Minister: Yes, that was at the back of my mind.

Mr Speaker: The Prime Minister may answer questions 14 and 15 at the same time.

The Prime Minister: Yes, 14 and 15 at the same time. And so they came to what our officials think is a dubious proposition, because one cannot calculate development, particularly with the tremendous industrial development in Singapore, or the expansion in consumption. They came to the agreement that we were to pay 3 cents royalty per thousand gallons and we charged the cost of treatment at 50 cents per thousand gallons. Unfortunately, or rather fortunately, depending on which way one pitches one's hopes, the Johore Government did not yield to pressure from their State Assemblymen to scrap the agreement and ask for something more. We could not persuade the Johore Government to scrap the agreement and go back to the old one where we supplied them at 25 cents, even though we were supplying it below cost. But then we tap the rivers for what we can make up for that. However, the best that could be done is to stick to the agreement in 1955.

The total payment - this is the answer to question No. 14 - to the Johore Government for water supplied from the Tebrau water works from 1st March, 1955, to 30th September, 1961, is $1.8 million. The estimated payment to be made to the Johore Government for the supply of water to Singapore in 1962 is $.57 million. Sir, I am not aware of any expenditure on the part of the Johore Government for providing this supply which we undertake and extract on our own, other than helping with a few police escorts during the time of the strike to maintain the water works. The collection, filtration, pipelines and storage are all at our expense. In fact, we also supply Johore Bahru with their requirements for water at cost. But I would like to add that the Johore Government leases the catchment area to the Singapore Government at a purely nominal rent. So we have to be thankful for our blessings.

As to question No. 15+, the estimated payment to be made by the Johore Government to the Singapore Government for water supplied by Singapore in 1962 is $.625 million, of which the estimated cost to Singapore is $.562 million. As I said, the reason for increasing the rate of 25 cents to 50 cents per thousand gallons of filtered water is that the cost of supplying the water, of treating it, has increased for the Singapore Government. The charge of 25 cents per thousand gallons was below cost in the last few years, although it was the cost when it was fixed many years ago. The Singapore Government would have preferred to retain the old cost at 25 cents in the old agreement, which expired in 1948, and waive the extra cost of 25 cents per thousand gallons, provided we did not have to pay 3 cents per thousand gallons for extraction. However, as I said, the best bargain that was made in the circumstances was that the City Council and the Johore Government agreed to implement the new rates which we say was a preliminary agreement, but which they say was a final agreement in 1955 - at the time when the Member for Farrer Park was in the City Council. I think the Member for Anson was in charge of the Government then. Although several discussions were held, this is the position and the agreement will now be formally ratified.

Mr David Marshall: Mr Speaker, we are spending $11 million on the Scudai River project, and the Prime Minister mentioned a lease. Are the installations and the works which we will be erecting the property of the Singapore Government on freehold; and if not, what are the terms of its ownership?

The Prime Minister: I am now speaking from memory. But I will supply the full information in a supplementary written answer. I think the last that I saw the file before I went off on leave and the Deputy Prime Minister took over was that we were pressing for a 60-or 80-year lease and they wanted a 20-year one. I am not quite sure exactly at what figure agreement has been reached. But I believe that the calculation has taken into account the amortization and the writing-off of these assets over the years of the lease. As the lease runs out, so will the capital installations be written off.

Mr Rajah: Mr Speaker, Sir, could the Prime Minister tell the House when he hopes to complete the Scudai River scheme and when he hopes to commence the Johore River scheme?

The Prime Minister: I am speaking now on the information supplied by the Leader of the House, as he was in charge of these negotiations which took place while I was on leave. The Scudai River scheme will be completed in two years from the time at which it was announced; and the Johore River scheme will be commenced as soon as possible. But we have not been able as yet to assess the approximate date of completion.

Mr Rajah: Will the Prime Minister assure the House that there are definite schemes in his ministry for commencing the Johore River scheme?

The Prime Minister: Sir, I cannot explain how valuable water is if only to keep us going in the Assembly. But I can assure the Member for Farrer Park that I have been most anxious about this situation. I have been watching the population curve and the consumption curve going up and finding out when the consumption curve is going to overtake the production curve. I have the full guarantee of the City Engineer and his assistants that the production curve will always keep ahead of the consumption curve.

The Scudai River scheme will be ready in two years. Just as we are about to be overtaken, we will take another leap forward and be pumping more. Just as we are about to be overtaken, the Johore River scheme will be finished. I can only say, Sir, that I trust that they have done their calculations correctly. I am sure they have done it to the best of their ability. I only hope that the population of Singapore will not rise faster than it has been doing. They have estimated that, going on at the normal rate 4 per cent, all will be well. But if - and this is really the point - the Jurong project gets under way and industrial consumption goes up tremendously and unexpected demands are made, then it may well be that we will have to ask the Johore Government not to insist on buying out our Kota Tinggi and Gunong Pulai reservoirs. They want to buy them over because, as I have explained, the water there is the sweetest in South Johore. It almost requires no chlorination. We would like to keep it in reserve in case unexpected demands are made by industry on the use of water.

Mr Rajah: Mr Speaker, Sir, I understand the Singapore Water Engineer is in Europe looking for water for Singapore. Could the Prime Minister please tell the House what progress the Water Engineer is making in Europe in securing water?

The Prime Minister: I have it on the authority of no less a scientist than the Leader of the House that the City Water Engineer is not in Europe seeking water. He is seeking a consultant on how to tap water faster. He is due back shortly. Perhaps if the Member for Farrer Park will raise the matter again after the City Water Engineer has come back, I will be happy to table a report setting out the success of his sojourn in Europe - I mean his success in looking for a consultant engineer.