SINGAPORE – The hike in water price ensures that PUB can continue to cover operating costs while investing in infrastructure to maintain a reliable water supply, said Senior Minister of State for Sustainability and the Environment Amy Khor.

External cost pressures have been increasing the cost of producing and supplying water, which has exceeded the current water price, she said in Parliament on Wednesday, in response to Leader of the Opposition Pritam Singh (Aljunied GRC).

Besides asking whether the price hike could have been delayed, Mr Singh also questioned the effectiveness of the water conservation tax in lowering consumption compared with water-efficiency measures.

He noted that apart from the Covid-19 pandemic years, when more people stayed home due to restrictions, water consumption has been on the decline.

In response, Dr Khor said the water tariff and water conservation tax make up the price of water, which pays for producing, supplying and conveying it to users. The conservation tax reflects the scarcity value of water and acts as an incentive for consumers to use it wisely, she added.

The price hike ensures future investments can be funded, said Dr Khor, highlighting the need for $3 billion in capital investments to meet future water demand.

In 2022, national water agency PUB had issued $800 million of green bonds for long-term infrastructure, she noted.

The water price hike will be implemented in two phases – a 20-cent increase in April 2024 and a 30-cent rise in April 2025 for every cubic m of water.

Non-Constituency MP Leong Mun Wai asked if an even more progressive multi-pricing increase can be implemented instead as most of the future increase in water consumption will come from larger, non-household users.

Dr Khor said the pricing is meant to reflect the scarcity value of water and encourage consumers to save water. “Therefore, everybody, whether it’s individuals, households, businesses and communities, ought to pay the right price for water. And that’s why we don’t have an additional band.”

Once the price hike is fully implemented by 2025, most households will pay an additional $4 to $9, excluding the goods and services tax, for their monthly water bill, according to PUB estimates.

In 2020, the average monthly consumption of water was 15 cubic m for condominium units, and 16.2 cubic m for HDB flats.