PUB, the national water agency, thanks Mr Francis Cheng for his feedback ("Consider tiered pricing for water use"; Nov 12).
The total price of water comprises the water tariff, used-water charges and the water conservation tax.
The water tariff and the water conservation tax are currently tiered.
Households using less than 40 cubic m of water a month pay a water tariff of $1.17 per cubic m, and a water conservation tax at 30 per cent of the water tariff.
Those who use more than 40 cubic m of water pay a higher tariff and water conservation tax, at $1.40 per cubic m and 45 per cent of tariff, respectively.
This differentiated tariff and water conservation tax serve to discourage excessive water consumption.
Water is priced to reflect its long-run marginal cost, that is, the cost of producing the next drop of potable water. In this way, the scarcity value of water is reflected right from the very first drop.
As water price is charged based on the quantum of water used, households which use less water will incur a smaller water bill.
The Government also provides Utilities-Save rebates to help HDB households defray utilities expenses. This helps to ensure that water remains affordable, especially for the lower-income HDB households.
Besides managing water demand, PUB's plan is to progressively increase supply capacities to meet the growing demand, and to cater for resilience against contingencies such as prolonged dry weather.
There is a natural limit to supply augmentation from local catchments, as two-thirds of Singapore is already water catchment.
We will increase our non-conventional water supply sources (that is, Newater and desalination capacities) to meet up to 85 per cent of our water needs by 2060.
This will also help to reduce our vulnerability to weather uncertainties.
We also agree with Mr Cheng that the public can help look out for water wastage in public areas. They can call PUB's 24-hour call centre on 1800-CALL PUB (2255 782) to make a report.
Chua Soon Guan
Deputy Chief Executive (Policy and Development)