Can Johor’s US$1.1 billion plan help it stop relying on Singapore for treated water by 2030?

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JOHOR BAHRU: The five-year plan unveiled for Johor to develop three more reservoirs alongside three water treatment plants so that it no longer needs to rely on Singapore for treated water by 2030 is an “ambitious” proposal but it has a challenging timeline given the scale of construction, analysts told CNA. 

The plan – which is estimated to cost more than RM5 billion (US$1.13 billion) – requires the Malaysia federal government, the Johor state government as well as various government agencies to collaborate and work in tandem, they added. 

Meanwhile, environmental experts stressed that it was important for the southern state to pursue self-sufficiency for the resource quickly, especially given the growth of its water-intensive data centre industry and recent pollution issues along some of its main rivers which have impacted the health of local residents. 

Last Sunday (Mar 9), local daily New Straits Times reported that the Johor state government, in collaboration with Putrajaya, has allocated RM1.6 billion to construct three new reservoirs along the Johor River, Pontian Besar River and Sedili Besar River. 

The report added that three new water treatment plants will also be built at a cost of RM3.5 billion, with this set to increase the state’s treated water supply by 41 per cent. 

The report also quoted a Johor state official as saying that the reservoirs and water treatment plants were a crucial part of Malaysia’s Zero Dependency Project aimed at reducing reliance on treated water from Singapore. 

Under the 1962 Water Agreement signed by both countries, Singapore can buy 250 million gallons of water a day from the Johor River, at 3 sen for every 1,000 gallons.

In return, Johor has the right to buy back a daily supply of treated water from Singapore, of up to 2 per cent of the raw water it supplied, at 50 sen for every 1,000 gallons.

Johor currently imports an average of 16 million gallons of treated water a day (mgd) from Singapore, well above the 5 mgd that Singapore is obliged to sell back to Malaysia under the agreement. 

According to the Malaysia Investment Development Authority, as of 2022, Johor consumes around 371 mgd and that this figure is set to increase in subsequent years due to the growth of data centres in the state. 

At the Singapore-Malaysia Leaders’ Retreat in 2023, Malaysia Prime Minister Anwar Ibrahim and then-Singapore Prime Minister Lee Hsien Loong agreed that both countries would resume discussions on the raw and treated water prices, “without prejudice to each other’s respective long-declared positions on the right to review the prices under the 1962 Johor River Water Agreement”.

Both sides also agreed to resume discussions on measures to safeguard the water quality, as well as increase the yield of the Johor River, to ensure its sustainable supply to the extent required by the agreement.

AMBITIOUS PLAN WILL AID JOHOR IN SELF-SUFFICIENCY: ANALYSTS 

Johor’s target of reducing the volume of treated water it imports from Singapore and not being reliant on it is key in its pursuit for self-sufficiency, experts told CNA. 

Charles Santiago, chairman of the National Water Services Commission (SPAN), told CNA the three new reservoirs – known as Takungan Air Pinggiran Sungai (TAPS) – will increase the availability of raw water for the state. 

SPAN is a government-linked regulatory body responsible for the water and sewerage industry in Peninsular Malaysia. 

He added that the upcoming water treatment plants – which are paired with the three reservoirs – would boost Johor’s ability to supply treated water to its residents and also meet the demands of the growing data centre industry in the southern state. 

He said that the volume of treated water in Johor could then increase by around 1,200 mgd in total, eclipsing the amount Johor currently imports from Singapore by 75 times. 

“(The projects) are progressing as planned and are expected to be completed within the designated timelines,” Santiago told CNA.  

“While the five-year timeline is ambitious, its success will depend on the efficient implementation of sustainable practices and strong collaboration between the federal and state governments, developers, regulatory bodies, and local authorities.” added the Democratic Action Party member who was a three-term parliamentarian for Klang constituency. 

But analysts have cautioned that meeting the timeline could be challenging given the scale of construction. 

They cited that on average, reservoirs typically take around eight years to construct. Even though water treatment plants can be designed and commissioned in two years, the reservoirs are crucial in increasing the volume of raw water Johor collects, they added. 

Yet, many are sanguine that the five-year timeline is achievable provided there is support from Putrajaya. 

“Achieving the targeted water reserves within five years is a significant challenge, but not an impossible one,” water quality and modelling specialist Zaki Zainuddin told CNA. 

He stressed that this matter is particularly urgent for Malaysia to ensure Johor strives for self-sufficiency in water supply and resources. 

“This is especially relevant for Johor (often regarded as Malaysia’s second or third most developed state). The urgency is further amplified by Johor’s ambitions in the data centre sector,” said Zaki, who is an expert panelist for Malaysia’s Department of Environment and is adviser to environmental consultancy firms. 

Conservation scientist Serina Rahman, who is a lecturer with the National University of Singapore’s Southeast Asian Studies department, echoed similar sentiments. 

She told CNA: “Johor has had an influx of investment in recent years so I think financially (supporting quick construction of the projects) might not be a problem – especially if there is top-down support (from Putrajaya).”

Serina added that the water agreement with Singapore expires in 2061 and that looking ahead to this, it was key for Malaysia and Johor to be independent in treating its own water. 

“The demand for water in Johor will increase especially with investments related to the special economic zone expected to draw people to stay and be based in Johor. Perhaps Johor is now at a stage of development that enables it to process its own water,” she said. 

Earlier this year, Malaysia Prime Minister Anwar Ibrahim and his Singapore counterpart Lawrence Wong witnessed the exchange of an agreement on the Johor-Singapore Special Economic Zone (JS-SEZ) at the 11th Malaysia-Singapore Leaders’ Retreat in Putrajaya.

The JS-SEZ is to be jointly run by Malaysia and Singapore with both countries setting sights on the creation of 20,000 skilled jobs in the first five years. 

DATA CENTRES’ EXPANSION MUST BE MANAGED: EXPERTS  

Even as the five-year plan to develop the reservoirs and treatment plants is expected to supercharge water supply in Johor once they are completed, analysts CNA spoke to stressed that the state government must be careful in managing the expansion of the data centre industry.

This as the industry is energy-intensive and requires a copious amount and consistent supply of water for cooling systems. 

Speaking at an event in July 2024, then-Johor Bahru city council mayor Mohd Noorazam Osman stressed that the current focus on data centres is “understandable” but that the “real issue” in Johor is water and power supply. 

“As a local authority, I believe attracting investments is important, but it should not come at the expense of the people’s needs,” he had said. 

Johor is on its way to becoming a major data centre hub for Southeast Asia. According to data centre intelligence website DC Byte, the southern state’s data centre capacity has grown from just 10 megawatts (MW) in 2021 to 1,500MW in 2024. 

It also has more than a dozen data centre facilities, including investments from multinational corporations like YTL, Yondr and AirTrunk. 

S Piarapakaran – who is the president of water and energy think tank Association of Water and Energy Research Malaysia (AWER) – told CNA that the aggressive boost in Johor’s water supply over the next five years may help the state fulfill its potential for the data centre industry but that water consumption for residents must be the priority. 

He added that authorities must be more discerning of projects with excessive demand for treated water and that they must be empowered to impose stricter laws on consumption.

“The Water Services Industry Act 2006 empowers the regulator to impose stricter water consumption rules for selected high treated water dependent operation. The direction has to come from the federal regulator to be implemented by state governments,” said Piarapakaran. 

SPAN chairman Santiago has urged the federal and state governments to impose water usage limits for the data centre industry as well as urge these companies to consider alternative sources. 

“SPAN encourages the recycling and reuse of discharge water from cooling tower systems to promote sustainable water management,” he told CNA. 

NUS’ Serina noted that the state government has formed a data centre development coordination committee which vet through applications for data centres. 

According to a report by The Straits Times, Johor rejected four out of 14 applications from overseas data centre operators submitted between June and November 2024. 

“The state government is aware of this and has a system to evaluate these investment proposals to see whether the organisation can function more sustainably,” said Serina. 

DEALING WITH RIVER POLLUTION INCIDENTS 

Experts also told CNA that the construction of more reservoirs and water treatment plants will help the state mitigate the risk of water supply disruptions caused by pollution.  

Zaki, the water quality and modelling specialist, told CNA: “Essentially, clean water can be stored and utilised during pollution incidents. Similar strategies, such as off-site river storage, have been implemented in several states, such as Selangor.”  

During the 2019 Malaysia-Singapore Leaders Retreat, Mr Lee – the Republic’s then-prime minister – had raised concerns over pollution and long-term yield of water from Johor. 

He said that waterworks of PUB – Singapore’s water treatment plant in Kota Tinggi – had to be shut then because of high ammonia levels, with the pollution traced to a burst reservoir of a bio-composite centre in Sedenak. 

The incident did not affect Singapore’s water supply but disrupted water supply to about 17,000 households in Kulai, Johor.

This followed an incident of illegal dumping of toxic waste at Sungai Kim Kim in Pasir Gudang which resulted in toxic fumes that affected thousands of residents and led to about 100 schools in the area being shut down.

“If the Johor River suffers an incident like that (at) Sungai Kim Kim recently, I think it will be disastrous for both countries,” Mr Lee said then.

The phenomenon of pollution along Johor rivers are not isolated incidents. In October 2021, Johor ruler Sultan Ibrahim Sultan Iskandar criticised some residents for disposing of their waste into the drainage network, leading to floods in various parts of Johor Bahru. 

More recently in September last year, toxic chemical pollution along rivers in Johor led to the closure of three schools, leading to the formation of a special task force to tackle the issue. 

AWER president Piarapakaran said that non-governmental organisations have raised this issue of pollution in rivers, and authorities have made amendments to existing laws to increase severity of punishment for companies who illegally dump toxic waste. 

However, he acknowledged that in Johor’s case, more can be done to clamp down the issue, as stringent enforcement must continue so as to ensure the new reservoirs are not polluted. 

This includes developing an indicator mechanism to record “downtime from water services” so that water suppliers have a benchmark to adhere to. 

He added that treatment plants and reservoirs should also be installed with ammonia stripping facilities to deal with ammonia pollution. 

“The collaboration between federal and state agencies is vital for (these measures) to be put in place,” said Piarapakaran.

Editor’s note: An earlier version of this article incorrectly stated the quantity of water that Singapore can buy daily from the Johor River. We apologise for the error.