Hydrology and water stress events in Singapore

Singapore receives consistent and abundant precipitation throughout much of the year with heavier concentration occurring between November and January during the wet phase of the Northeast Monsoon season. However, due to its geology, there is no natural aquifer that is commercially viable or is being currently used. Instead, Singapore relies on water catchment areas that cover two-thirds of the total island surface and 17 water reservoirs that store collected rainwater. Singapore has experienced only four major floods in the last 60 years and it experiences many flash flood events during heavy rains but it has drastically reduced its flood prone areas by 98% in the last 30 years through $1.6 billion of investments. As for droughts, Singapore experienced extreme drought events in February 2014, which was the driest month in nearly 150 years, and again in August 2019, which was the driest and hottest month in record.

Water supply and demand

Over the last 50 years, Singapore has developed a robust and diversified supply of water called the “Four National Taps”, as demonstrated by the figure below.

1. Water from Local Catchment

Through the network of rivers, canals and drains, rainwater on two-thirds of Singapore’s land area is collected to the 17 reservoirs. This makes Singapore one of the few countries in the world to use urban rainwater on a large scale for potable consumption, and PUB aims to  harness water from the remaining rivers near the coast using a technology that can treat water of varying salinity. By 2060, Singapore’s water catchment area is expected to cover 90% of the island.

2. Imported Water

Under the 1962 Water Agreement, Singapore is allowed to draw up to 250 million gallons a day (mgd) of water from Johor River until 2061. Imported Water is treated in PUB Johor River waterworks in Malaysia before supplies to consumers.

3. NEWater

NEWater is a high-quality, safe-to-drink reclaimed water produced from treated used water, which is further purified using advanced membrane technologies and ultra-violet disinfection. Singapore’s 5 major NEWater plants can meet up to 40% of the nation’s current water needs. By 2060, NEWater is expected to meet up to 55% of Singapore’s future water demand.

4. Desalinated Water

Singapore’s 3 major desalination plants can meet up to 30% of Singapore’s current water needs. Two more desalination plants are expected to be ready by 2020. By 2060, desalinated water is expected to meet up to 30% of Singapore’s future water needs.

As for the demand side, the current water demand in Singapore is about 430 mgd, with homes consuming 45% and the non-domestic sector accounting for the rest. It is predicted that Singapore’s total water demand would almost double by 2060, with the non-domestic sector taking up 70%.

Water Treatment

Until 2010, wastewater in Singapore was collected through a sewer system that included 139 pumping stations that pumped water to wastewater treatment plants. These pumping stations and plants were gradually decommissioned since the Deep Tunnel Sewerage System (DTSS) became operational. DTSS uses deep tunnel sewers to convey used water by gravity, and centralizes it to coastal-area water reclamation plants. Phase 1 of the DTSS covering the eastern part of Singapore is completed in 2008, while Phase 2, which will cover the western part of Singapore, is expected to be completed in 2022.

Among the existing sewage treatment plants, four are already turned into NEWater Plants, where wastewater is to be treated and purified into reclaimed water or discharged into the sea. Reclaimed water is used in industries or recharged into the water reservoirs instead of directly supplied to the pipelines.

Problem / Challenges

1. National Security

National security has been at the center of Singapore’s water issues since the birth of the nation because it has had to import the majority of its freshwater from Malaysia, which has threatened to cut it off or revise the pricing at times. Singapore currently imports 40-50% of its water consumption from the Johor River located in Malaysia via Johor Waterworks, which Singapore owns and operates.

The Malaysian government has attempted to revise the terms and pricing a few times for the current 1962 Water Agreement that expires in 2061. In 2000, Malaysia asked for a 200 times increase in water price or a price revision and Singapore countered with a request to fix water supply rates beyond 2061, and the discussion eventually disbanded. Considering that the 1961 Water Agreement between the two nations already expired in 2011 without being renewed and as water scarcity intensifies globally, Singapore will have a more difficult time negotiating with Malaysia at the termination of the Agreement. For this reason, Singapore aims to achieve total water self-sufficiency by 2060, just before the expiry of the Agreement. Finally, the fact that the Johor Waterworks had to temporarily shut down in April 2019 due to a palm oil refinery explosion and contamination upstream further demonstrates the potential risks of relying on a foreign water supply source.

2. Global Climate Change

Although Singapore has one of the most well-designed and carefully-maintained water infrastructure in the world, climate change has posed existential threats to this system. According to the official projection by the Centre for Climate Research Singapore, the country will experience a mean sea level rise of up to a metre by 2100, as well as an increase of rainfall by 25% for the 2070–2099 period. Such changes will place an unprecedented threat to many water infrastractures. For instance, the Marina Reservoir and Marina Barrage will need more pumping facilities to deal with higher sea level and city floods, which also requires a substantial amount of energy. The rise of sea level may also cause salinity change in surface water and groundwater. The existing and planned desalination plants will be more expensive if the salinity is to rise, and the drinking water treatment plants will also face new challenges when processing the water from local catchment areas.

As precipitation in Singapore becomes less predictable and less evenly distributed through the months, Singapore will experience more frequent and extreme floods and droughts and will therefore need to improve its flood management and to diversify its water resources. PUB is targeting its flood prevention efforts in areas where flash-flooding and ponding still occur, and it has so far identified 22 canals as requiring upgrades to allow for increased run-off volumes. In addition, climate-resistant water sources like NEWater and seawater desalination will become ever more important in Singapore’s water portfolio.

3. Economics

Singapore enjoys a reputation as the global water hub of advanced water treatment technologies, but these new technologies tend to be more energy dependent than the traditional ones. Collecting and making rainwater drinkable is fairly cheap, which takes just 0.2kWh of energy to treat a cubic metre. However, it takes 1 kWh/m3 to turn sewage effluent into NEWater and 3.5 kWh/m3 to make seawater drinkable. The cost of the latter two ‘manufactured’ sources of water supply will be a significant issue when Singapore clearly envisions its water future with weather-resistant, self-sufficient reuse and desalination. According to PUB, NEWater and desalination will have to meet 85% of Singapore’s water needs by 2061 (55% and 30%, respectively), when the demand is expected to be twice as today’s. Such large-scale application of energy-intensive technologies not only increases the national carbon footprint, but also makes Singapore more dependent on imported energy.

As a result, the Singapore government has to make the trade-off between national security and economic prices. Although the price of global energy costs are expected to continue rising, there are obvious political implications of choosing water independence despite all the additional capital and energy required. The main reason is that imported energy can be from the international market, while water supplies can only be economically imported from a single source, Malaysia.

Last but not least, the sewage system is not free. To collect sewage for the NEWater, deep pipes are planned across the island, which may face challenges as the city itself develops further and further underground.

Proposal: Strengthen PUB’s fiscal independence and expand its authorities to a comprehensive coverage of all water infrastructure

Singapore’s Unique Institutional Advantage

Our proposal aims to leverage Singapore’s unique and strong institutional framework for water policy and to improve it even further by paving the way for PUB’s fiscal independence and making its authority more comprehensive.

As a city-state, Singapore does not have the typical conflicts of interest across federal, state, and city levels and this structure facilitates the integration of responsibilities within the government. Public Utilities Board (PUB), Singapore’s major water department, is living proof of this: it has comprehensive authority over the entire water loop in the country and is both a utility service provider and a regulator. Furthermore, Singapore residents’ water-electricity-gas is combined into one single bill, and the rebates are credited in the same billing system. 

One important issue that we aim to address is that PUB’s revenue does not cover all its expenses so it relies on the Singaporean national government to foot in the bill every year in the form of grants and also to make necessary capital investments. Like most water agencies, PUB’s primary revenue source is water rates, which are priced according to usage, potability and water quality, as well as the water conservation tax charged as a percentage of the water tariff and the sewerage tariff. However, its annual revenue has not been enough to pay for all its expenses as shown in the PUB’s financial statements below. In the latest annual report available online, there was a 50 to 60 million Singaporean dollar deficit (35 to 42 US million) in 2016 and 2017. As for investments, the spending amounts from the PUB and from the national government were comparable, meaning that PUB only has roughly half the capacity to invest on its own. For some other water projects, PUB has to raise money from the financial market by issuing bonds. We think that PUB’s dependence on the government every year could introduce political forces to the water domain and cause inefficiency.

Proposed Solution

Our proposal has four components: 1) maximizing revenue, 2) minimizing costs, 3) instituting a permanent capital source for investments, and 4) extending PUB’s oversight. PUB could maximize revenue by implementing dynamic water pricing so that its total revenue is more consistent regardless of the total demand level and also by charging its clients according to their usage and willingness to pay. On the cost side, it could incorporate more smart technology like smart meters to achieve maximum operational efficiency. Supply and demand management can address both revenue and demand aspects because it could prevent costly and unnecessary capacity expansion and other expenditures that can arise from unforseen mismatch in supply and demand levels. This can be achieved by ensuring the flexibility of the supply capacity, primarily through NEWater and desalination, and by managing the demand side through central economic planning. That is, Singapore could design and better predict its future water demand by promoting the development of industries that are compatible with NEWater. Having detailed projections based on usage by industry and Singapore’s characteristically small proportion of agricultural water users could result in a flexible and predictable non-residential water demand.

As for investments, Singapore could institute a permanent capital source to provide a more long-term capital base for water infrastructure development. It could partner with domestic pension funds or sovereign wealth funds like GIC and Temesak or raise money through infrastructure asset recycling similar to the model used in Australia. Benefits would be that PUB would not be dependent on the volatile conditions of the financial markets and would be able to plan for the long-term and make necessary and adequate investments. Finally, we believe that the PUB could benefit from extended oversight integrating all water programs currently under other government agencies, such as the ABC program under the national government and the U-save Rebate under the Ministry of Finance. It would curtail bureaucracy, align interests, and improve PUB’s operations. In particular, we argue that ABC Waters should be managed and financed under PUB because Singapore will face climate change related issues that will likely affect the local rainwater catchment supply directly in the future and this will require more direct management and frequent investments.

Our proposed solution seeks to further improve the unique Singaporean water institution through complete fiscal independence and expanded authority in order to streamline the water policy and free up more resources to invest in additional infrastructure that will be required to address Singapore’s upcoming water challenges.

References

PUB, The National Water Agency. “Singapore water story.” last modified 2019. https://www.pub.gov.sg/watersupply/singaporewaterstory

PUB, The National Water Agency. “Imported Water, The Second National Tap”. https://www.pub.gov.sg/watersupply/fournationaltaps/importedwater

PUB, The National Water Agency. “PUB pushes the frontier of water technology to reach future energy and sludge reduction targets”. last modified July 4, 2018. http://www.nas.gov.sg/archivesonline/data/pdfdoc/20180704002/Press%20Release_PUB%20RD%20blueprint.pdf

PUB, The National Water Agency. “Water Price”. https://www.pub.gov.sg/watersupply/waterprice

“PUB’s waterworks in Johor stops operations after high ammonia levels found in Johor River”. last modified April 04, 2019. https://www.todayonline.com/singapore/pubs-waterworks-johor-stops-operations-after-high-ammonia-levels-found-johor-river