The Government faces two challenges in water supply. First, to provide enough clean water to meet the needs of our people, industry and other businesses. Second, to meet this demand in a cost-effective manner, so that PUB water remains affordable to all.

Here in Singapore, we do not face any water shortage today or in the foreseeable future. However, recognising that Singapore has limited natural water resources, we are taking measures now to ensure that future generations of Singaporeans will never be short of drinking water. Our large-scale production of NEWater is one such measure. Desalination is another.

Currently, we depend on two main sources of water supply: our own local catchments, and Johor until the 1961 and 1962 Water Agreements expire. These two sources are adequate for our needs, but we have, nevertheless, decided to supplement them with NEWater and desalted water. In this way, by 2011, when the 1961 Water Agreement expires, we will not need to renew it. By 2061 when the 1962 Agreement expires, we can be totally self-sufficient, if there is no new water agreement with Malaysia.

We are grateful to Malaysia for supplying us water all these years, and in the years to come. However, I see our diminishing reliance on Johor water in a positive light. It will take the sensitive issue of water out of the equation of bilateral relations. Singapore and Malaysia can then focus on mutually beneficial cooperation. Together, we can be a formidable force in economic competition against others, and in addressing other common challenges.

I am pleased that our plans to increase self-sufficiency in water are taking shape. We are launching NEWater today, while PUB had awarded the tender for desalinated water last month.

The result is that instead of depending on just two water sources - local catchments and Johor water - we will, by 2005, have four water sources, three of which are totally within Singapore. Our water supply will become more robust and resilient.

Of the four sources, NEWater has the most profound impact on our future water supply. NEWater was little known as recently as a year ago. Today, it is known to most, if not all, Singaporeans.

NEWater is more than a clean and safe product. It is a strategic concept. It adds to our water supply by turning every drop of water we get, from, for instance, rainfall, into more than one drop of clean water. It helps us to be self-sufficient in water.

NEWater will be used primarily for non-potable purposes. This is not because it is not clean enough for domestic use, but because its ultra pure characteristic can be put to better use in industries such as wafer fabrication which requires ultra pure water.

Since the beginning of this year, PUB has been supplying NEWater to seven wafer fabrication plants. The feedback is positive. Demand has now reached 4 million gallons per day (mgd), and is still growing. Other industries and the commercial sector are asking for NEWater too. Since mid-January, PUB has been supplying NEWater for air-con cooling to Century Square and Telepark Building at Tampines Regional Centre. In time, NEWater will become the primary source of water for industry and the commercial sector for various non-potable uses.

By 2011, PUB expects the demand for NEWater to exceed 55 mgd. To meet this strong demand, PUB will build a fourth NEWater plant at Ulu Pandan. It will serve the industrial hub at Jurong, Tuas and Jurong Island, as well as commercial centres in the Central Business District. With a capacity of 35 mgd, it will be the biggest NEWater plant to date.

With this Ulu Pandan plant, and the other three NEWater plants at Kranji, Seletar and here at Bedok, we will be able to deliver NEWater to industrial estates and commercial centres in most parts of Singapore.

We will also use NEWater for domestic purposes. Last year, PUB mounted a public education exercise on NEWater as a source of drinking water. The support far exceeded PUB’s expectations. I am told that responding to popular demand, PUB issued 1.5 million bottles of NEWater to the public in a short period of six months. An independent poll by Forbes Research in October 2002 showed an overwhelming level of NEWater acceptance among Singaporeans. 82% indicated that they were prepared to drink it directly, while 16% were prepared to drink it indirectly through mixing with reservoir water.

As announced by PUB in September last year, we are adopting the indirect approach for NEWater as a source of drinking water. Starting today, we are introducing 2 mgd of NEWater into our reservoirs. This is just under 1% of the amount of water that we consume daily. We will increase the amount progressively to 10 mgd by 2011, about 2.5% of our daily consumption then.

Understandably, some Singaporeans may be concerned whether the introduction of new water sources - NEWater and desalted water - will lead to an increase in the price of PUB water.

In pricing water, we have to recover the full costs of production and distribution. In addition, to encourage water conservation, and reflecting the limited supply of water in Singapore and the higher incremental cost of additional supplies, we also levy a water conservation tax.

In 1997, the Government raised water prices in gradual steps to the current level of $1.17 per cubic metre for water tariffs and 30% for the water conservation tax. Together, we pay a total of $1.52 per cubic metre of water. At that time, desalination was the main alternative to meet our increased water needs. Due to the high cost of desalination then, we indicated that after reaching the current level of $1.52 per cubic metre, the next step would be to increase water prices further to around $2 eventually.

Today, I am pleased to tell you that with advances in technology and improved energy efficiency, additional water sources are less costly than our projections five years ago. Desalination has turned out to be cheaper, while NEWater is even cheaper than desalted water. We are confident of keeping the cost of PUB water to below $2 for some time.

That said, I want to emphasise that this does not mean that we can now use as much water as we like. We must never forget that water is a precious resource. While we continue to find cost effective ways to increase our water supply, we must also keep demand down by using water wisely.

PUB is stepping up its efforts to educate the public on water conservation and help them save water at home, for instance, through installing water saving devices such as thimbles and cistern water saving bags. A recent pilot project by PUB showed that households which installed these devices were able to reduce their water consumption by about 5 to 8%. If we run water-efficient homes and adopt water saving habits, we can lower our utility bills significantly. More importantly, we will help stretch our national water sources.

In launching NEWater this evening, I want to acknowledge the overwhelming support of fellow Singaporeans who have rallied behind NEWater. I want to acknowledge too, key players in industry and the commercial sector for giving NEWater your stamp of approval. Last but not least, I want to recognise the efforts of the PUB staff and their technology, industry and user partners for making NEWater a reality for Singapore. It is the full and concerted support of all Singaporeans that has brought us here today. Once again, Singaporeans have shown their ingenuity in overcoming a huge challenge to our survival.

It is now my pleasure to:

• declare open the NEWater Visitor Centre and the Bedok and Kranji NEWater Plants;
• launch the supply of NEWater to our wafer fabrication parks and commercial hubs; and
• begin the pumping of NEWater into our reservoirs.

Thank you.

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