Singapore's water prices to increase by 18% over next two years

Singapore’s national water agency, PUB, has announced a notable 18% hike in water prices over the next two years, in light of rising production and supply costs since 2017.

As of now, potable water for most households is priced at S$2.74 (US$2.01) for every 1,000 litres.

This price augmentation translates to an added 50 cents per cubic metre, divided over two increments: 20 cents in 2024 and 30 cents in 2025.

By 2025's end, a majority of households will experience a minimal increase in their monthly bills, under S$10, PUB projected.

Businesses, on the other hand, will face diverse impacts. While three-quarters of them will witness less than a S$25 monthly hike, hawkers will see a moderate increment of less than S$15.

It is the households with larger water consumption, beyond 40 cubic metres a month, that are set to endure the most substantial surge in their water bills. Their rate will surge by 70 cents for every excess cubic metre consumed, amounting to S$4.39 by 2025.

Simultaneously, the price for NEWater — Singapore's treated reclaimed wastewater used mainly for industry and cooling — will ascend by 17 cents, also in two stages.

PUB cited multiple reasons for this price surge, including a significant 37% rise in electricity market tariffs and a 35% spike in construction costs.

Other contributing factors include the escalating expenses for essential chemicals in water treatment and mounting maintenance costs.

Additionally, the agency also emphasized the rising operational costs and heavy investments required for water infrastructure, such as the second phase of the Deep Tunnel Sewerage System which costs S$6.5 billion, nearly double its first phase.

As Singapore faces the challenge of almost doubling its water demand by 2065, PUB is set to rely more on NEWater and desalinated water — two of its four primary water sources. Although resilient against extreme climate impacts, these sources are pricier to produce.

The PUB has rebuffed any suggestions of postponing this price surge, emphasizing that a delay would necessitate even steeper price hikes in the near future. According to PUB, this decision supports its commitment to ensure Singapore's water security amidst climate change and burgeoning water demands.

In light of these changes, the government is set to introduce financial aid for lower- and middle-income households to alleviate the cost of living pressures. Deputy Prime Minister Lawrence Wong will reveal more details on the upcoming support measures.

Moreover, the recent water price increment aligns with Dr Amy Khor's speech at the 18th World Water Congress on 11 September.

The Senior Minister of State for Sustainability and the Environment highlighted Singapore's continuous efforts over the past 60 years to bolster water security through its “four national taps framework”.

She noted that the cost of water delivery in Singapore is rising, and this trend may persist, despite the incorporation of innovative technologies, adding that this likely escalation will be reflected in the country’s water prices.

However, a closer look at PUB’s annual reports shows a Net Income of $2.4b after Government Grants and Contributions to the Consolidated Fund and Tax over the decade preceding FY2021. This finding challenges Dr Khor's claims about financial constraints and the imminent price increments.

The last substantial revision in water prices was in 2017, resulting in a 30% increment over two years, which led to a public protest at Hong Lim Park and public outcry online.