GAS AND WATER AGREEMENT (Progress report)

[Mr Speaker in the Chair]

Dr Koh Lam Son asked the First Deputy Prime Minister and Minister for Defence whether he will give a progress report on the 'gas and water agreement' with the Malaysian Government.

The Minister for Trade and Industry (BG Lee Hsien Loong) (for the First Deputy Prime Minister and Minister for Defence): Mr Speaker, Sir, on 28th June 1988, the Prime Ministers of Malaysia and Singapore signed a Memorandum of Understanding agreeing the following:

(a) That Singapore can proceed with the construction of a dam on Sungei Linggiu (a tributary of the Johor River), plus pipelines and ancillary works. This project will be implemented under the 1962 Johor River Water Agreement, which provides for Singapore to abstract up to 250 million gallons per day from the Johor River.

(b) That Singapore can purchase treated water from Johor in excess of her entitlement of 250 million gallons per day under the 1962 Water Agreement. Johor will build at its own cost treatment plants and facilities, as necessary, for the sale of this treated water.

(c) That Singapore will purchase 150 million standard cubic feet of natural gas per day from Malaysia for power generation.

The Public Utilities Board commenced work on the Linggiu Dam project in September 1988. Site survey and soil investigation works are nearing completion. Construction of the access road and site clearance work for the dam will begin soon. The compensation payable for the land required for the project is being negotiated with the Malaysians. The project is expected to be completed by the end of 1992.

On the supply of natural gas to Singapore, the price and the annual premium have been agreed upon. Petronas and PUB are now discussing the technical and operational details.

Once all these outstanding issues are settled, the necessary agreements can be signed.