Malaysia (Singapore) - Johore River Water Supply Project

RESTRICTED Report No. TO-411c This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF THE JOHORE RIVER WATER SUPPLY PROJECT SINGAPORE, MALAYSIA January 6, 1965 Department of Technical Operations  CURRENCY EQUIVALENTS U.S. $1.00 = M$3. 06 M$1. 00 = U.S. $0. 327 M$1, 000, 000 = U.S. $327, 000 ABBREVIATIONS gallon = imperial gallon = 1. 20 U. S. gallons MG = million gallons GPD = gallons per day MGD = million gallons per day gpcd = gallons per capita per day (4. 58 liters per capita per day) psi = pounds per square inch ppm = parts per million (by weight) FISCAL YEAR January 1 through December 31  APPRAISAL OF THE JOHORE RIVErA WATER SUPPLY PROJECT SINGAPORE MALAYSIA Table of Contents Paragraphs SUMMARY AND CONCLUSIONS i-x I. INTRIODUCTION 1-3 II. THE PROPOSED BORROWER 4-13 III. SINGAPORE IMETROPOLITAN AREA 14-18 A. General Description 14-16 B. Population Growth 17-18 IV. THE; EXISTING WATER SUPPLY SYSTEM 19-53 A. General Description 19-21 B. Present Water Service and Use 22-27 C. Water Quality and Public Health Aspects 28-29 D. The Sewerage System-Relative to Water 30-32 E. Organization and Management 33-37 F. Finances 1) Water Service Rates & Charges 38,-43 2) Billing and Collections 44-45 3) Financial Data 46-53 V. THE PROJECT 54-68 A. Water Use Estimates 54-57 B. Description of the Project 58-60 C. Other Works 61 D. Cost Estimates 62-64 E. Implementation 1) Planning and Design 65 2) Procurement and Construction 66-67 3) MianageLment 68 VI. FLNANCING PLANS AND PROJECTIONS 69-89 A. The Proposed Project and the Water Department 1) Financing Requirements and Sources of Funds 69-71 2) Financial Projections 72-74 3) Water Rates 75-80 B. Financial Position of the Public Utilities Board 1) E;lectricity Department 81-84 2) Gas Department 85 3) Overall Position 86-89  Table of Contents (Cont'd.) Paragraphs VII. JUSTIFICATION OF THE PROJECT 90-97 VIII. CONCLUSIONS AND RECOMvENDATIONS 98-103 ANNEXES 1 Organization Chart of Public Utilities Board 2 Organization of the Water Department 3 Population Trends 4 Technical Description of Existing Water Supply Sources 5 Trends of Water Production and Use 6 Changes in Water Rates 1948-1962 7 Technical Description of Proposed Project 8 Detailed Cost Estimates of Proposed Project 9 Water Department: Income Statements 1958-1972 10 Water Department: Cash Flow Statements 1958-1972 11. Water Department: Balance Sheets 1958-1972 12 Electricity Department: Summarized Income and Cash Flow Statements 1958-1969 13 Electricity Department: Balance Sheets 1958-1969 14 Gas Department: Summarized Income and Cash Flow Statements 1958-1970 15 Gas Department: Balance Sheets 1958-1970 16 Consolidated Cash Flow Statements Public Utilities Board 1961-1969 17 Consolidated Balance Sheets Public Utilities Board 1958-1969 18 Assumptions for Financial Projections MAP 1 Existing and Proposed Water Supply System  APPRiAISAL OF THE JOHORE RIVER iATER SUPPLY PnOJECT SI1UGAPORE * ALAYSIA SUMYIARY AND COiNCLUSIONS i. The State of Singapore, Mtalaysia has requested a loan from the International Bank for Reconstruction and Development to cover part of the cost of constructing the Johore River Water Supply Project. The pro- posed loan would be made to the Public Utilities Board of Singapore and would be guaranteed by Malaysia. ii. The Public Utilities Board is an autonomous public corporation with the sole responsibility for the water supply, gas and electric utili- ties in Singapore. The Bank has made a previous loan to Singapore on behalf of the Public Utilities Board (Loan No. 337-SI, May 16, 1963) for construction of the Pasir Panjang "B" Thermal Power Station. iii. Under the Public Utilities Board, the Water Department supplies substantially all of the water used for domestic, governmental, commercial and industrial purposes by Singapore's more than 1,800,000 people (estimated 1964) as well as by a considerable population in the State of Johore, Malaysia. In spite of the Water Department's notable progress in extending its service and increasing its sources of supply, the reliable capacity of existing water sources has fallen behind Singapore's water requirements which have more than doubled since 1950. As a result, water rationing was required for several months in 1961, 1963 and 1964. Works in progress will correct this situation until about 1968, but past growth trends in water demand are expected to continue and unless new water sources are developed by 1968 the water deficiencies of the present are expected to recur. iv. The proposed Johore River project would increase the reliable water production capacity of the water utility by 30 MGD (million gallons per day) to about 132 MGD, sufficient for estimated requirements until about 1972-1977. The project would comprise the construction of the first stage of a long-range program to develop the considerable water resources of the Johore River. It would include intake works on the river, raw water supply conduits, a water treatment plant, pumping facilities and about 17 miles of transmission main. The basic plant would have a capacity of 30 KGD while the intake works, the transmission main and certain other elements would be adequate for flows up to 60 1viGD to accommodate a second stage expansion due for completion in about 1975 or 1976. Furthermore, the proposed Johore River source and plant would be able to accommodate additional periodic future expansions which would meet Singapore's increasing water requirements for many years. The project also includes the retention of management consultants by the Public Utilities Board and of engineering services for the study of major elements of the water distribution system. v. The proposed project is economically and technically sound. There is no reliable and economically competitive alternative which-- could be developed now to satisfy Singapore's long-range water supply requirements. The proposed schedule for implementation is reasonable and sound.  -ii- vi. The proposed loan would amount to USp6.8 million equivalent to cover the estimated foreign exchange costs comprising about 50% of the total project expeniditures of US$13.7 million equivalent including con- tingencies, engineering and management consulting costs and interest during construction. Local currency costs would be met from cash generated by operations of the Public Utilities Board and by loans from the Government of Singapore. The cost estimates and financing plan are realistic and sound. vii. The present and prospective financial condition of the Public Utilities Board is sound. However, consistent with sound management of its financial affairs, the Board may find it necessary in the near future to increase average water revenues by at least 10% by adjustments to its water rates. viii. Improvement and expansion of the water supply utility is a neces- sary component of Singapore's program of public expenditures to encourage industrial growth and to improve housing and living conditions for its population. ix. At present, the Public Utilities Board is deficient in high-level professional staff and, in turn, effective management of its affairs. However, on the basis of agreements reached during negotiations (set forth in para. 103), the Board would be a suitable borrower. x. The proposed project would be a suitable basis for a loan of US$6.8 million from the Bank to the Public Utilities Board for 20 years including a four-year period of grace.  I. INTRODUCTION 1. On February 16, 1963 the State of Singapore applied for a loan from the International Bank for Reconstruction and Development to help finance the construction of the Johore River Water Supply Project. The borrower would be the Public Utilities Board of Singapore and the loan would be guaranteed by Malaysia. The loan would amount to US$6.8 million to cover the project's foreign exchange costs, comprising about 50% the total project expenditures including contingencies, the cost of consulting services and interest during construction. Local currency costs would be met from cash generated by water supply operations, and loans from the Government of Singapore. 2. The appraisal of this project is based on information submitted to the Bank by the Water Department of the Public Utilities Board and on field investigations by members of the Bank's staff in July 1963 and in June and November 1964. 3. Projects for obtaining water for Singapore from the Johore river in Malaya have been under consideration for more than 20 years as a prob- able long-range solution to Singapore's water supply requirements. During that time a number of engineering studies of this possible water source were made by the Water Department and various consulting engineering firms. Until the present time, however, actual implementation of a Johore River Project, based on such studies has been periodically postponed, first because of World Wlar II and, following that, because of several years of anti-government guerrilla activity in the vicinity of the proposed head- w7orks. The planning on which the present project is based has been done by the lWater Department and by Binnie & Partners, a firm of British con- sultants, hereafter referred to as the Consultant, retained by the Wiater Department to make an economic and technical appraisal of existing and planned wrater supply works in Singapore and Johore, and whose studies confirmed the soundness of the proposed project.  -2- II. `H, X?L09P0:D BO0IROW;R 4. The borrower would be the Public Utilities Board, an autonomous public corporation solely responsible for the wa.t;r supply, gas and electric utilities of Singapore. It was established by the Public Utilities Ordi- nance, 1963 and came into being on Ldy 1, 1963. Under this act the d4ater, Gas and Electricity undert.tkings, together with all related functions, services, assets and liabilities, und n.atters incidental thereto, were trans- ferred from the City Council to the Public Jtilities Board. The Board is established as a body corpor-te with perpetual succession and a comlmon seal, it may sue and be sued in its corporate name and mlay enter into contracts, et cetera. The board is established as one financial entity but the ordi- nance requires separate accounts to be kept for the wvater, gas and elec- tricity undertakings. A functional chart of the ,ublic Utilities Board is shown in annex 1. 5. The Bank has made one previous loan to Dingapore for the Public Utilities Board. The proceeds of' Loan ivo. 337 LIi, oingapore Power P-roject, dated ixay 16, 1963, were relent to the Board for the first stage of the Pasir Parkn;g "B" IThermal Power station. 6. 'The Bodrd is composed of a chairrmlan, a deputy chdirman and eight members, all of whom are appointed by the Yang di-Pertuan i4egara (Head of the State of Singapore) for three-year terms. Board members _.re eligible for reappointment. One Board ixiember is required to be a public officer but the other seven miembers cannot be public officers. ..ith approval of the 0overnment, the board is recuired to appoint and employ a uenerall L_nuger, a uhief emin- ancial Officer, and chief engineers for the 'vater, Gas and .lectricity Jepart- ments. The Board cannot remove such persons fromii office without goverrment consent. The government is required to consult with the Public ;ervice Cor.u_ission be2ore approving the Board's appointment or removal of these officers. In addition, pursuant to its agreermients writh the Bdnk in connection with the Singapore Power Loan, th2re will be no appointment of a general MIanager or Chief Electrical Engineer :.rho is not acceptaDle to the 3ank. The Board may also establish such other posts as it considers necessary Lo carry out its functions. appointnients and promotions to all such posts are made by the Board and the termination, disrmiissal and disciplinary control of all its employees is vested in the Dodrd. iievertheless, the gov riuent, with tlle consent of the Public oervice koL.XLission, may require that for such posts as the government sees fit the Board shall exercise such functions on the advice of the Public Lervice Gommission. 7. The Public Utilities Board is responsible for constructing, oper- ating and managing works necessdry for securing ,nd providing adequate supplies of water, gds and electricity for public or private purposes and has the necessary powers to carry out tiiese responsibilities. 'The board may contract for the purchase and sale of land, the supply of goods, the construction of works and f'or consulting services as necessary for carrying out its duties and functions. l'he Board may also ernt-r into contracts to provide bulk supplies of later, gas and electriedl energ outside of oin5a- pore, subject to gov,rnment approval. The i3ourd can establish policies and enact regulations coverin6 its operdtions anid controlling the conditions under which it provides its services; however, such regulations require the approval of the govornment.  -3- 8. The Public Utilities Board is responsible for collecting adequate revenues and conducting its affairs so that its total operations are self- sufficient. To accomplish this the Board has full authority to set rates and charges for its services without review or approval of the government. The Board is ernpowered to cut off its services to any customer for default in payment of bills. Where the Board considers it uneconomic to nrovide services requested by landowners or government it may require the landowners or govermnent to make a contribution toward the capital outlay necessary to provide the services and has established a formula by which the amount of contributions (and in some cases refundable deposits) is determined. 9. The Public Utilities Board can raise loans from the government or, with the consent of the government, from any other source. The terms and conditions of such loans are subject to the approval of the government. 10. The Board is required to maintain proper accounts. These are audited annually by an auditor nominated by the government. In accordance with the Loan Agreement for the Singapore Power Project, the auditor must be acceptable to the Bank. Annual reports on the activities of the Board must be submitted to the government as soon as practicable after the end of each year. Annual estimates of income and expenditure for the ensuing year must be adopted by the Board and submitted to the government. Govern- ment approval of annual reports and annual estimates (budgets) is not re- quired as such although the government, under its other powers, could require the Board to make changes which it deems to be in the public interest. 11. Subject to the direction of the Board on matters of policy, the General Manager is responsible for direction of the business of the Board including organization, administration and control of its employees. In addition to the General Jianager's Department and a Secretariat, the functions of the Board are implemented by the following departments: The Water, Gas and Electricity Departments, referred to as "trading departments" and each under the direction of a Chief Engineer; the Finance Department under the direction of the Chief Financial Officer; the Architect's Department, and the Transport Center. The last three are referred to as "service depart- ments". 12. An organization chart and a description of the functions of the Water Department is given in Annex 2. 13. The organization, duties, responsibilities and powers of the Public Utilities Board as prescribed in the Ordinance were established in consul- tation with the Bank at the time when it was considering the Singapore Power Loan. At that time the Bank considered that, in general, the provisions of the Ordinance and the means proposed for implementation thereof were satis- factory. However, the Bank was concerned that the Board would lack sufficient freedom in the appointment and control of its staff and in certain other aspects of its operations requiring government approval as indicated by the paragraphs above. Therefore, in a suoplementary letter to Loan Agreement 337 SI for the Singapore Power Project, the government agreed that its powers with respect to the Board would be exercised with due consideration for the agreed desirability of giving the Board a high degree of autonomy in the conduct of its affairs.  -4- III. SINGAPORE lETROPOLITAN AREA A. General Description 14. The island of Singapore is situated just off the southern tip of the Malay Peninsula. It is 26 miles long and 14 miles wide. A cause- way across the narrow Johore Strait connects the island to the mainland and carries a road and a railway as well as vital water supply mains from the State of Johore, Malaysia. The City of Singapore is located in the south-central portion of the island. The topography in the western and central sections of the island of Singapore is characterized by regions of low hills and ridges ranging from about 100 to 500 feet above mean sea level while in the east the land is relatively flat; except along the coast, nearly all of the land is between 50 and 100 feet above mean sea level. In the eastern and western sections, there are exten- sive areas of fresh water swamp land, now largely drained and planted. A large section of the valley land in the central section of the island is devoted to catchment areas and reservoirs which provide about 25 to 30% of the island's public water supply. The City was built over marshes that were filled and hills that were leveled. 15. The island of Singapore and adjacent portions of the State of Johore, are shown on Map 1. For the purposes of this report, the name Singapore refers to the City of Singapore, the remaining portion of the island which is not within the city limits plus the "southern islands" which are adjacent to the main island of Singapore. 16. With its strategic location, fine harbor, and excellent commer- cial banking, insurance and storage facilities, Singapore has been one of the main trading centers of the East for over a century and has achieved an average per capita income of about ivI1k40O (equivalent to US$460), compared with ii$900 for Malaysia as a whole. In recent years, however, the government has initiated a program intended to accelerate industrial development in order to diversify Singapore's economy, maintain the ad- vance of income and reverse a trend of growing unemployment. Since 1961 the government has greatly expanded its program of public capital ex- penditures to facilitate and encourage industrial growth as well as to improve housing and living conditions for its rapidly growing population. This public sector investment program includes improvement and expansion of the public water supply, gas and electric utilities with the object- ives not only of maintaining adequate standards of service against a rapid demand increase by the population but also to provide such services as part of the foundation for an accelerated pace of industrial development.  -5- B. Population Growth 17. Censuses and estimates of population have been made for Sing- apore since 1871 (Annex 3). These show that Singapore's population has grown from 227,600 people in 1911 to 1,718,000 1/ in 1961. During those 50 years the average rate of population increase was equivalent to about 3.5% per annum and has never averaged less than 3.0d0 per annum between any two successive population counts. Between 1947 and 1957 the average rate of increase was equivalent to about 4.4% per annum of which 3.5% was due to natural increase. The balance of about 0.9% was due to net immigration, almost exclusively from the Federation of Malaya. Of the total 1957 population, about 63% resided in the City of Singapore. 18. There are no factors which indicate that the rate of Singapore's overall population increase will change drastically during the next 10 or 20 years. Annex 3 includes forecasts of Singapore's population growth to 1992 includin& that used as the general basis for design of the pro- posed project. The forecasts prepared by Singapore's Department of Statistics exclude the migration factor and are based on the 1957 rate of natural increase as well as on assumptions of 1% and 2/o per year de- creases in the birth rate. The maximum forecast shown in Annex 3 is based on continuance of the average annual growth rate experienced be- tween 1947 and 1957. The forecast used as the general basis for design predicts a population of nearly 3.2 million in 1982. According to the other forecasts, this population could be reached between the years 1976 and 1986. I/ Including 30,765 classified as non-resident, made up primarily of transients and foreign armed service personnel.  SINGAPORE - OFFICIALS Lee Kuan Yew _ Prime Minister Lim Kim San - Minister of Finance - Fullerton Bldg. former Minister of National Development Sim Kee Boon Permanent Secretary " Ministry of Finance Mr. Leembruggen Deputy Secretary - Ministry of Finance - Rev. & Finance Lum Choong Wah _ Principal Ass't. Secty - Ministry of Finance %1 /2-. 1 Athsani Karni - "" 71 / I/ Dr. Goh Keng JSt.fO _ Minister of Defense & Internal Sec. former Minister of Finance KoW Ah Loy - Trade Division _ Ministry of Finance Mr. Eric Khoo Deputy - Better than KoW Tan Guan Aik - familiar with Bank missions Expenditure-Division- present pos-ition & future -urends Mr. S. C. Chua Chief Statistician Peter TQn _ Assistant Statistician P. A. Nathan (Indian) Formerly in Statistics now EPtA EDB _ Hon Sui Sen - Chairman Lim Ho Hup _ Manager IF Tang - Chief Tech. Asstt. Div. EDB Ngiam Tong Dow Chua Kim Yeow - Acct. General _ through M. of F. Ministry of National Development Minister k7& W.) PArm. Sec. Howe Yoon Chung _ knows Bank very well - friend of Bevan VtW 't Wt KR K - La"r Ministry or National Development 10% agriculture 90% housing & urban development (subsidy question?) competing with private builders? E. W. Barker - Minister of Law Econ. Planning Unit Dr. C. R. KrishnamoVrthy Chief (Planning Advisor) Francis Lim Phai-Sorn o. Deputy Secretary - Cooperative . Gil, Waide  Foreian Assets of Singapore A8 at the end of 1964, Singapore owned the following foreign as3i3et8 s- I ;n ., 2ic 1. ~State loverrnnt 20 2. Governrment Agencie<, andl public authorities 175 3. Silgapore':s share ot' currency 305 (lBoard Assets (20,;)j It. Coin'ercial Banl.s, net of' ohort-tarxi foreign lifbilities 200 (6st.) Tohal. 1 200 (ITSo100) (of which, sinking funds l5) In addition to these asasets, there are known to be large foroidn holding3 by individuals, insurance conparies, and other enturprises, 'which may well exceod ,11,hO-50O million.  - 6 - IV. THE EXISTING WATER SUPPLY SYSTEM4 A. General Description 19. The public water supply system in Singapore originated in 1857 with a pipeline from the site of the present MacRitchie Reservoir to the town. The provision of a public water supply became the responsibility of the Water Department in 1878. Since that time the system has expanded steadily and has managed, until recently, to keep reasonably close to Singapore's increasing, over-all requirements for the supply and distribu- tion of water. 20. The water system now supplies practically all water used in Singapore including the small, neighboring islands; it also supplies water for a part of the State of Johore. There are four separate sources of supply - two groups of reservoirs (one group in Singapore and the other in Johore), one river supply source in Johore and a small ground water source in Singapore. These are capable of producing about 25,600 MG dur- ing normal years (about equal to present requirements) and about 23,800 MG during dry years. A new source in Johore (Scudai River) came into opera- tion in 1964 and, with other scheduled improvements to existing plants, will increase the dependable dry weather water production of the system to a maximum of about 102 MGD (about 37,200 YG per year) by 1966. All water is treated by clarificabion, filtration, chlori-is'ion, anld fluorida- tion before going into the distribution system. The svy_ cemn includes a total of about 950 miles of transmission and distribuiu on ai-ais of which more than one third have been -,stalled since 1952 The. disirxibution system includes a new "high pressure zone". A more to.ijn,4.:al description of the existing water supply sources is given in Anne:: 4; 1-.K 1 gives a general picture of the existing supply sources and the principal trans- mission mains from Johore to Singapore. 21. As implied above, the Water Department has done reasonably well in improving and extending its system to meet the city's cortinuous growth in water service requirements. This is not to say, houcever, that the system does not have serious deficiencies. In recent years the rapid growth of Singapore and past delays in the implementati-on of long range plans for the water system have caught up with the Water Department. Population growth, improved housing and increased per capita income, with attendant increases in domestic water-using capacity, and the water require- ments for commerce and industry have brought present average and maximum daily water use to about 75 and 85 YOD respectively. This average is about 15 MID above the reliable yield during dry periods of sources exist- ing in 1964. The effect of this was felt in 1961 and 1963 (and continued through February 196h) when water rationing was imposed at considerable expense to the Water Department and with substantial hardship to the population. Even with the new Scudai River source and other scheduled improvements to existing facilities, water demand is expected to exceed reliable supply capacity again by 1968 to 1970. To correct this deficiency, new supply, treatment and transmission facilities are required. The population growth and the extensive housing development program also have resulted in the construction of taller buildings and the spread of the urban areas further from the center of the city and onto higher land.  - 7 - As a result, the arterial supply mains, distribution storage tanks and water pressures have become seriously inadequate in a number of areas. To correct these problems, the supply mains and distribution networks require improvements and high-pressure systems are necessary in a number of areas; but before these corrections can be made a comprehensive study of the distribution system is required. B. Present Water Service and Use 22. The Water Department estimates that at least 97% of the total population of about 1,800,000 (1964) uses water from its system 2Z Alternate water sources are limited. For all practical purposes it is safe to assume that all water for domestic and commercial 2/ uses is taken from the public system. In addition, most water used by industry, especially that processed for sale (beverages, ice, etc.), also comes from the public sources. 23. The water supply system is reasonably well operated and main- tained and provides about the best service possible with the available facilities. Until recently, service was continuous and water pressures were adequate for most customers in the developed areas of Singaporeo With rationing in 1961, 1963 and 1964 (para. 21) service to essentially residential areas was shut-off for 8 to 12 hours during each day by opening and closing some 500 distribution system valves. Many new multi- storied apartment buildings, both public and private, and new buildings on higher ground are above the levels to which the existing system can provide water at adequate pressures 3j/e As a result, water is unobtainable in such buildings unless they are provided with costly pumping and roof storage facilities. Recently, the spread of a number of large fires in older sections of the city was attributed in part to very low water pressures which hampered fire fighting. 24. As of August 1964 there were about 145,000 service connections to the public water system. Of these, about 108,000 were for domestic water supplies, 24,000 were to commercial and industrial establishments and the balance of about 13,000 connections were largely for government and public use including 2,500 public standpipes (street hydrants) and latrinese On the average about 8,000 to 10,000 new connections are added each year (but the number of public standpipes has not increased materially since 1959). All service connections have been metered for a number of years; even the public standpipes are metered. Meters are owned and serviced by the Water Department. There are about 5,000 fire hydrants on the system. 1/ Including the population of small islands off Singapore but excluding the Johore population which uses treated water sold to the Government of Johore. 2/ Hotels, restaurants, shops, office buildings, etc. 3/ One high pressure system, Queensway, to serve such buildings has been developed by the Water Department in cooperation with the Housing and Development Board of Singapore.  -8- 25. There have been no comprehensive surveys of the number of dwelling units actually served by water connections or the number of people who have access to these connections. The most reasonable estimates indicate that between 1.0 and 1.2 million people are served in this way; yet, for at least 100,000 to 300,000 of these people in the slum areas such service must be no more than one faucet for several families. About 600,000 or more people obtain water from the public standpipes. The large numbers of people not adequately served by domestic water connections, however, is attributable largely to poor housing conditions rather than to inadequacy of the water supply system. In fact, the Water Department claims that applications for new connections are never rejected on grounds that there are "1no water mains in the vicinity". 26. Excellent quantitative data on water use by different categories of consumers is available for Singapore. A summary of this information by years from 1949 is included in Annex 5. Total water pumped into the system averaged 69.6 PiGD during 1962. This is equivalent to about 39.4 GPCD for the total population and a reasonable figure for Singapore. The total water pumped each year increased more than 100% between 1949 and 1962 and, on a per capita basis, by one-third. The drops in 1961 and 1963 were due to water rationing. Other fluctuations in per capita consumption from year to year are attributed to inaccuracies in the estimated populations for the years between official censuses. 27. The largest increase in consumption during the period shown was for domestic use. In 1962, domestic consumption averaged about 18.5 GPCD and amounted to 47% of the total water pumped. This included 5.9 NGi) used at public hydrants and latrines. Commercial and industrial use has remained nearly constant on a per capita basis (ranging from about 7.5 to 10.0 GPCD) but was 13.5 MGD in 1962 or about 19% of total water pumped. Water used by government, including the armed forces, has increased to about the same magnitude. (Government usage undoubtedly includes a considerable amount of domestic consumption at barracks and staff housing facilities.) The unaccounted-for water (water produced for which there is no revenue) has ranged from about 7 to 9% of total water pumped. This is a remarkably low figure since a water supply utility usually does well to account for 80 to 85do of pumped water. It represents the extent of the Water Department's efforts to detect and control leaks, to keep meters in good operating condition and especially to account and charge for water used even for such purposes as flushing sewers and washing streets (by metering of hose streams). Over-estimation of non-metered use probably contributes to this low figure. Nevertheless, the fact remains that revenue is collected for about 92% of the total water pumped into the distribution system.  -9- C. Water Quality and Public Health Aspects 28. Water distributed by the system is safe bacteriologically and of good chemical quality. There is no evidence of unusual corrosiveness or other characteristics which could render the water unsatisfactory as a source for domestic, industrial or commercial purposes. The chemical and bacteriological characteristics of the water before and after treatment are determined regularly as the basis for control of the water treatment processes. Wiater taken from various points in the distribution system is analyzed and tested daily to determine chlorine residuals and evidence of contamination or degradation in the distribution system. In general the Water Department appears to maintain standards of water quality at least equal to the "International Standards for Drinking Water" recommended by the World Health Organization. 29. Health statistics for Sin:apore show very low incidence of diseases normally attributable to inadequate or deficient water supply systems. Recently; however, a number of cases of a certain stain of cholera broke out after several months of water rationing. Although it was conmonly thought that this outbrealk was related to the water shortage, there has been no direct evidence to support this view. Nevertheless the occurrence em- phasized the potential danger of the spread of intestinal diseases during periods of wiater shortage and rationing when pollution can enter water mains which are not under pressure and when levels of personal sanitation are liable to go down. D. The Sewerage System - Relative to Water 30. Because of its interrelation with the water supply system, Singaporets sewage disposal system has been reviewed to determine the existence of any obvious deficiencies in the facilities, or in planning, which could influence the proposed water supply improvement program. In Singapore, sewage disposal is the responsibility of the Public liorks Department. Sewers extend through- out the City of Singapore and into adjacent urban areas. Data on the popula- tion served by sewrers is only approxinate but indicates that by the end of 1963 about 850,000 to 900,000 people in the City (nearly 70 of the total city population) were served by connections to the public sewer system. An additional estimated 50,000 people are served by individual household septic tanks or cesspools which are said to operate reasonably well. This total of about 900,000 to 950,000 people who are served by liquid waste disposal facilities, represents some 80 to 90% of the estimated population served by public water supply connections. The balance of the population of Singapore, about 800,000 people, are served by latrines. About half of this population resides in the rural areas of the island and the other half in the slum areas of the City. 31. The Public Works Department charges for sewage and waste disposal services on a flat rate basis. Billing and collection is done by the Public Utilities Board as part of its consolidated billing operation. 32. Records since 1956 indicate that Singapore has been extending its public sewage disposal service at a greater rate than the rate of population  -10- growth. There is no indication that any inadecuacies of the existin, sew- erage system restrict present demands for water. .xpansions pro6raLuned for the next few years would extend sewer ser;ice to an additional 300,000 people. Such expansion undoubtedly would be primarily in connection with Singapore's housing development program and thus should serve a majority of the people now living in the slum areas. xstirsates of future water supply re2uirements appear to be consistent with Singapore's program for housing improvements and, in turn, the expected expansion of the public sewer system. E. Organization and i.anagement 33. On the basis of the brief record to date, it appears that in general the organizational framework of the Board is adequate and that the Board has in fact enjoyed a satisfactory degree of autonomiy and freedom from outside interference (para. 13). Unfortunately, however, the Board has not yet been able to make substantive arranger.ents for effective Lianagermient or for correct- ing deficiencies in the professional staff at various levels. The most obvious deficiency is that there is still no perrimanent General iianager. The importance to the new Board of a strong i,dministrative head, experienced in -lanagement of public utilities, was recognized by the sank and the Governmlent at the time of the Singapore power loan. Therefore, in a supplementary letter to the loan docunernts on the subject of ranagement, the Government agreed to continue its efforts to obtain the services of a suitable nmanager. Such eff'orts as have been made to date have not been successful, and the Board has had to make do with an officer of the Government's Adrainistrative Service serving as Acting General Iianager. 34. Deficiencies and weakne5ses in the organization at other levels also exist and were recognized at the time that loan No. n37 'SI was made; agree- ments relative to improvement of the situation were included in thie supple- mentary letter on manaGeiuient. Nevertheless, the Board has failed to make significant progress in assessing and improving the capabilities of its professional staff, in recruiting qualified and experienced persons to fill vacancies, or in retaining certain key qualified professional stai'f. %miong the latter are the Chief and h-ssistant Chief financial Officers, two of the most competent senior staff members. Responsible staff positions have thus to be filled by accelerated promotion of men who do not yet have the exper- ience recquired for their new posts. bome of the older staff members are clearly over-loaded while others (such as the Chief later Bngineer) have been retained on short-term contracts after the date of i-andatory retirement. 35. Fortunately, the shortcomings outlined above as yet have not seriously affected the day-to-day dctivities of the Ivater Departrient (such as operation and mlainitenanice of its facilities), or of the Board as a whole insofar as they relate directly to the laater Jepartm,ent (such as meter reading, billing and collections). lorale in sub-professional levels appears to be good. The wJater Jepartment has a lon8 experience of sound operating and maintenance procedures and the Department appears still to have sufficient technical talent for these to continue. Laintenance appears to be especially good and the Department is justifiably proud of its efforts to reduce leakage losses and to account for the disposition of water pumped into the system. The  - 11 - Board's vital functions of meter reading, billing and collections, all under the Finance Department, are carried out in accordance with sound public utility practices. 36. Nevertheless, the management and professional staff shortcomings, unless resolved in the near future, can be expected to have an increasing detrimental effect on the conduct of all of the Board's affairs including day-to-day operations. With particular reference to the Water Department as an example, some aspects of long-range planning and the implementation of such plans are already deficient, A vital, comprehensive study of the primary supply and distribution mains, leading to a long-range improvement program to permit maximum effective utilization of the new supply sources is deferred because of the shortage of capable staff. Management use of the internal audit is practically nil (pointing up the possibility of a weakness in the organizational set-up). Water meter servicing may be excessive but no study has been made to find out. Other departments also are affected by planning deficiencies. Also, a tendency toward narrow ex- perience with the Board by the professional staff and the lack of effective programs for rotation and training can be expected to result in continued promotions of poorly prepared staff to higher positions. 37. The establishment of effective management and improvement of the Board's professional staff is not only essential, but, in view of the very rapid increase in the utility services that has come about and can be foreseen, it has become urgent1 The Banlc, after a detailed review, recently advised the Board that it should engage competent management consultants to conduct a comprehensive study of the Board's organization and operations against the background of both present and future operational levels and to make recommendations on which the Board would base appropriate action in consultation with the Bank. The Board has accepted these proposals.  -12- F. Finances 1) Water Service Rates and Charges 38. All water service connections are metered and the Public Utilities Board charges for all water supplied to these connections on the basis of the measured amounts used per month. Public standpipes and latrines also are metered and the government is charged for the water used. The amounts of water drawn from fire hydrants, either by the Fire Department for fire drills or fire fighting, or by the Public Works Department for flushing streets and sewers, is measured by special hose rmeters (or estimated) and charged to the respective government departments. 39. The schedule of the principal water service rates in effect at the present tme is tabulated below. This is a multi-rate system where the unit rate varies depending on the classification of the customer. For a given customer, the same unit rate applies regardless of how much water is used. Attention is drawn to the very high rate for shipping and to the compara- tively high rates for comrerce and industry. When the price of water for ships was increased in 1959 (from I'$2.75 per 1000 gallons) a notable reduc- tion in use resulted. Nevertheless, total revenues from sales to ships increased in 1959 and, in general, the ship rate is not out of line with charges at other ports in Malaysia, While there is no evidence to indicate that commercial and industrial water rates have significantly deterred such use to date, it is probable that the rates discourage heavy consumption in these categories; according to the Water Department potential industrial customers sometimes are seriously concerned by the level of charges. Furthermore, water revenues from commerce and industry evidently subsidize domestic consumption (see below), and to a lesser degree government water use, and this appears to be somewhat inconsistent with Singaporets intensive efforts to encourage industrialization. MS Classification Per 1000gallons Supplies to Shipping and Water Boats 3.75 Domestic Supplies 0o60 Water Processed for Sale 2.00 Water Used for Commerce, Trade or Manufacture But Not Processed for Sale 1.30 City Government (Including Fire Department) cost previous year / (0373 in 1963) Singapore Government and Armed Forces cost previous year plus 0.02 (0.75 in 1963) Johore Government 0.50 1| 0.85 in 1964 due to rationinL and resulting cost increases in 1963.  -13- 4o. The previous year's cost used up to 1963 as the basis for charges to the government is the computed average cost of production and distribution plus all financial charges, including sinking fund contributions and princi- pal repayments. This cost also included provisions for depreciation, but these have been insufficient as explained in paragraph 46. Since this cost has varied between M$0.71 and M$0.85 per 1000 gallons over the last 10 years, it is clear that the charges for domestic water use are subsidized by revenues from the other customer categories. The charges to the Johore Government are in accordance with an agreement which relates as well to Singapore's privilege of taking the major portion of its water supplies from sources in Johore. The present charge to Johore has been in effect since 1955 and although it is low, it exceeds the average cost of treating and pumping the water. 41. By comparison with the above rates, Kuala Lumpur charges N$0.70 for trade and M$0.30 for domestic consumption. Penang charges 1'$3.00 for ships, M$2.00 for industry, 1!$l.20 for commerce and M$0.50 to 0.99 for domestic use depending on the level of consumption. 42. Changes in the water rate structure between 1948 and 1962 are given in Annex 6. Rate changes can be made by the Public Utilities Board without government approval (para. 8) but there have been no adjustments since the Water Departnient was transferred from the City Council. 43. The water rates are not the only cost of water service to customers. By agreement, the customers pay the estimated cost of the water service connections, including meter, which average about M$150l In addition to paying the connection charge, a customrer also deposits a sum of 1$60.00 as security for payment of bills for water, gas and electric service. The Fire Department pays for the installation of hydrants which costs about Y4750 each. 2) Billing and Collections 44e Water, gas and electric meters are read mo,nthly by the same meter readers. Approximately 160,000 consolidated billsV representing 355,O0O meter readings, are prepared, checked by trial b-ilance, and mailed each month by the Mechanized Accounts Section of the Finance Department. Mailings usually are not later than 5 days from the date the meters were read. 45. Customers are given approximately 10 days from the date of mailing before a 48 hour reminder bill is sent out. Service is cut-off for accounts which are not settled within the 48 hours. On the average, about 3,000 services are cut-off each year although almost all discontinued services are reconnected within a short time when the customers pay the amount due including the cost of reconnection. Apparently, this billing and collection procedure works very well in Singapore and the amount of uncollected debts has been insignificant during the last years. These include also any rental charges for appliances leased to customers by the Public Utilities Board and sewer service charges collected for the Public Works Department.  3) Financial Data 46. The Public Utilities Board keeps separate accounts for the water, gas and electricity operations. However, some aspects of the accounting system do not conform to sound public utility practices. A supplementary letter to the Singapore Power Project Loan Agreement (337 SI) requires the accounting system to be reorganized in this respect. Another Supplementary Letter to that Agreement (and to the proposed agreement for this project) requires computation of financial performance using straight line depreciation based on an agreed schedule of useful life. To date the Public Utilities Board has made little progress implementing these changes, still using, for example, its old depreciation practice!/. For this report, depreciation has been re- calculated, retroactive to 1958, using the agreed straight-line method and schedule of useful life (Annex 18). 47. Other changes in progress, or required, are improvements in cost determination and cost control, control on the disposal of fixed assets still possessing utility or scrap value, and inventory control. 48. Annexes 9-11 show income statements, cash flow statements and balance sheets for the period 1958-1963, (as well as pro forma statements through 1972) for the Water Department. The water revenues in the past have been sufficient for the Water Department to maintain a sound financial position up to the end of 1962. Water rationing in 1963, resulted in lower revenues and increased costs. A return on average net fixed assets in operation varying between 8.5% and 10.8% was achieved during the last years preceding 1963 although the trend was downward. In 1963, however, this ratio dropped to 3.7%. The ratio of operating costs (including depreciation) to total revenues has been satisfactory, varying between 56% and 64% during the five years preceding 1963, when this ratio deteriorated to 82%. The debt-service coverage has been adequate, varying from 1.4 to 1.8 during the last six years. The debt/equity ratio improved from 57:43 in 1958 to 37:63 in 1963. 49. Summarized statements for the Gas Department are given in Annexes 14 and 15. Partly due to the fact that up to 1961 the contribu- tions required from developers to the capital cost of extensions were too high, development of the gas undertaking has proceeded at a slow pace. This policy was modified during 1961 and the growth rate is in- creasing. A rate of return on average net fixed assets in operation of 8.7% was achieved in 1963. To a large extent (more than M$7 million at the end of 1962), the capital requirements of the Gas Department were 1/ (a) Straight-line depreciation charged for assets purchased out of internally generated cash and based on useful life; however, the total of the accumulated depreciation not permitted to exceed 16% of the book value of the assets; (b) For assets purchased out of loan proceeds, instead of charging depreciation, the Board makes sinking fund contributions according to the terms of the loans.  - 15 - financed initially from Nunicipal Fund balances at zero interest, and since 1961 from cash generated by the other trading departments for which interest is charged internally. Due to the overall cash shortage of the Board in the period 1963/64, which is to be covered by additional borrowings, the other trading departments no longer -ill be able to finance the Gas Department's cash deficit. Government loans of M$5 million and M$8 million in 1963 and 1964 respectively were substitutes for financing by the other departments. 50. The financial operations of the Electricity Department, as indicated by Annexes 12 and 13, have been very satisfactory to date. The rate of return on average net fixed assets in operation was 14.8% in 1963 /. 51. Consolidated statements for the Public Utilities Board (Annexes 16 and 17) show its present financial position to be satisfactory. The debt/equity ratio improved from 69:31 in 1958 to 4h:56 in 1963; the return on average net fixed assets in operation varied between around 9% and 105% during the years 1959-1963. An overall return of not less than 8% is required according to the Singapore Power Loan Agreement and the proposed agreement for this project. 520 The total amount of outstanding loans to the Board is M$245 million against which an amount of around M$100 million in sinking fund investments was accumulated as at December 31, 1963. Sound financial management was exercised with regard to these investments with a view not only to providing the necessary cash at the redemption dates but also to investing in gilt-edged government securities with the highest yield. Around 35% of these securities consist of bonds, issued by the Singapore Government; the remainder is composed of Sterling Bonds issued by a number of Commonwealth governments. 53. Nearly all matters regarding the transfer to the government of assets formerly belonging to the City Council (not pertaining to water, gas or electricity undertakings) have now been settled. In the process of this transfer, certain adjustments in the accounts have been made. These are reflected in the financial statements included with this report and account for minor differences from figures given in Report No. TO-350B for the Singapore Thermal Power Project. 1/ This percentage is sonewhat inflated due to an adjustLient in depreciation rates; calculating depreciation as in the previous years the return would be about 11%.  -16- V. TIE PitOJECT A. Water Use Estimates 54. Estimates of future water production and sales as used for project design and for the financial projections are given in Annex 5. This includes data on the past, and the principal assumptions on which the future project- ions are based. The reliable yields of existing and proposed sources during dry periods as well as the more probable ranges of future water use and production requirements also are shown. 55. Vlith the completion in 1964 of the Scudai project and other plaxmed improvements, the reliable dry weather yield of the system will increase from about 60 NIGD to 102 DYLGD (as compared to present average and maximum require- ments of about 75 and 85 MGD). Consequently, the obvious depression in the rate of increase of water use and production since 1960, caused by water rationing during dry periods, should not continue. For this reason, in 1964 the rate of increase in production requirements is expected to resume in accordance with the general trend prior to 1961. At the scheduled completion time for the proposed Johore River project, 1967, average pro- duction requirements are expected to be above 90 riGD. The proposed project would increase dependable water yields to about 132 iYiGD. According to various estimates, this total capacity is likely to be fully utilized anywhere from 1972 to 1977 and perhaps as early as 1970. 56. During the period under consideration, domestic water requirements should continue to constitute about 50% of the total. They are expected to amount to about 55 to 65 1iGD by 1972 which would be equivalent to about 23 to 27 GPCD for the total population; 25 GPCD has been used for the financial projections. 57. The principal unknown, insofar as future water requirements for Singapore are concerned, is the requirement for industrial and conmercial uses. Since 1949, the total water use in these categories has remained fairly constant. For the purposes of the financial projections, a very nominal increase has been assumed; total industrial and commercial use (including sales to ships) would increase from about 13.5 MGD in 1962 to 21.U MiGD in 1972 - equivalent to an increase frorn about 7.6 GPCD to only 9.0 GPCD. ',iith any success for the goverment's intensive industrializa- tion program, and given the limited economically alternative sources of good quality water in Singapore, the above estimate as used for the financial projections may prove to be conservatively low. Some estimates (Annex 5) show industrial-commercial requirements as high as 42 lMIGD by 1972 in which case the added capacity of the proposed project would be fully utilized by about 1970.  -17- B. Description of the Project 58. The proposed project, to be located in Johore, would comprise the first stage of a long-range programi to develop the water resources of the Johore River as one of Singapore's principal water supplies. Some of the more technical aspects of the project are given in Annex 7, while Hap 1 shows the location of the works. 59. As the result of a number of engineering studies of alternative water sources which could be developed to meet a major part of Singapore's increasing water requirements, the proposed project, utilizing the Johore River, was selected. According to the plans, the Johore River lWorks eventually would be developed to take about 240 MGD from the river. The project now under consideration would have an overall capacity of 30 Il'iGD. Certain elements, however, would be constructed with a capacity of about 60 MGD to accommodate the second stage works anticipated for about 1972 to 1975. 60. The proposed project would include intake works on the river and raw water supply conduits to the treatment plant site. These would be sized to accommodate the second stage works. The raw water would be treated by clarification utilizing chemical aids, rapid sand filtration, chlorination and fluoridization. Following treatment, the water would be pumped though a 17 mile 66-inch diameter transmission main which, for the time being, would connect to the Water Department's existing transmission mains near the town of Johore Bahru. The transmission main is designed to accommodate flows up to 60 1M1GD although it would be extended the rest of the way to Singapore as part of the second stage project. Eventually, with continued expansion of the Johore River 'WJorks, the transmission main would be paralleled by a new main. The treatment plant would include diesel electric generation facilities for standby use and to level peak requirements for purchased power. The various structures at the plant would be designed and constructed to accommodate the future additions. C. Other W4orks 61. During the construction period for the proposed project other major works will be required to increase water supply and distribution capacity, though not included as part of the project. The Scudai River plant (para.20) and expansion of various existing pumping and treatment plants (para. 55 and Annex 4) in progress or planned, would increase reliable water yield capacities to levels which should be sufficient to prevent recurrence of shortages through the construction period. Improvements to the arterial supply and distribution mains and new service reservoirs also are required so as to effectively distribute the increased supplies of water. With the exception of the Queensway High-Pressure Zone, three new service reservoirs and certain works in the Jurong Industrial Area, there are no detailed long-range plans for the distribution improvements and this aspect of the water utility requires a comprehensive study (para. 37). In addition to the above major works, routine expansion and improvements should continue although at a somewhat higher rate than during the past few years.  D. Cost Estimates 62. The total cost of the project is estimated to be M$41.8 million (equivalent to US$13.7 million), including interest during construction. The cost estimate is summarized below and given in detail in Annex 8 which also gives the estimated expenditures for each year of the construction period: In Mlalayan Dollars Equivalent in US$ Local Foreign Foreign Currency Exchange Total Exchange Total (in thousands) Land Acquisition 1,600 - 1,600 - 525 Intake Works, Treatment and Pumping Plants 7,550 7,850 15,400 2,550 5,030 Transmission Main 6.600 6.900 13.500 2.250 4,415 Subtotal 15,750 14,750 30,500 4,800 9,970 Unallocated Contingencies 1.400 1.550 2,950 525 980 Total Construction Cost 17,150 16,300 33,450 5,325 10,950 Consulting Services 1,650 2,200 3,850 725 1,240 Interest and Other Charges during Construction2.200 2.300 4.500 750 1,470 Total 21,000 20.800 41.800 6.800 13.660 63. The estimates of construction costs are derived from estimates made by the Consultant and evaluated and approved by the Water Department. They are based on preliminary designs for the project, the results of recent bids for similar works for Singapore and els where in Malaysia and on current quotations for equipment and materials.d The individual items in the estimates include appropriate provisions for freight and insurance and allowances averaging about 6? for escalation and 10% for contingencies. Additional unallocated contingencies amount to about 10% of the estimated construction costs. Estimated cost of consultingincludes engineering for design and supervision of construction, management consultants and the engineering services required to study the water distribution system. The estimated cost of "Other 1iorks" (para. 61) is not shown above but is included under the financing requirements for the WJater Department (para.69). 64. The cost estimates for the proposed project and the assumptions on which they are based are reasonable. / Including actual bids on contracts comprising about 25% of the cost of this project.  -19- E. Implementation 1) Planning and Design 65. The engineering and economic feasibility studies on which this project is based were performed by the Water Department and their Consultant. The Consultant also has been retained by the Water Department to prepare the detailed designs and tender documents as necessary for construction of the project as well as to supervise the construction. The terms and conditions of this consulting agreement have been reviewed and are satisfactory. The design work, drawings and documents for some elements of the project were completed in January 1964 and the balance of the engineering is well advanced. 2) Procurement and Construction 66. About 12 major contracts for construction and for major items of equipment and materials are being prepared for this project. Because of the application for a loan from the Bank, the Water Department has consulted with the Bank about procurement procedures and has submitted draft documents for the Bank's review and comment. All major contracts would be awarded on the basis of international competitive bidding and the tender documents submitted to date are consistent with this objective. 67. The project construction schedule has been prepared in detail by the Consultant and appears to be realistic. The first tender invitations were issued during 1964 and the balance would be issued during 1965. The first contract award was made late in 1964. As planned, project construction would be completed by about July 1, 1967. In the event that water require- ments should develop more quickly than expected, the completion date probably could be advanced by three to six months. 3) lManagement 68. The proposed project would be implemented and operated by the Water Department of the Public Utilities Board. In order to help assure competence and continuity of management, the Board has agreed that appoint- ments to the posts of General Manager and Chief Water Engineer would be made only after consultation with the Bank. This requirement would be consistent with the provisions of the Singapore Power Loan. Because of the contirnuing management and staff problems of the Public Utilities Board since its establishment and the urgency for their resolution (paras. 33-37) the Board has agreed to retain the services of competent management consultants. These consultants, the terms and conditions of their engage- ment, and the actions taken by the Board on the basis of the consultants' conclusions and recommendations would be as agreed between the Board and the Bank. The costs of the management consulting services are included in the cost of the Wiater Supply Project and in the proposed loan.  -20- VI. FINhNCING PLANS AND PROJECTIONS A. The Proposed Pro.ject and the 'vWater Department 1) Financing Requirements and Sources of Funds 69. The financing plan proposed for the Water Department during the construction period 1963-1968 is summarized below: Requirements for Funds Millions Millions US$ Expenditures Johore River Project including interest during construction 41.8 Less expenditures before January 1, 1964 1l3 40.5 13.2 Other Expenditures: Scudai River Scheme 12.1 High Pressure Zone 0.5 Service Reservoirs 8.6 Jurong Industrial Area 5.5 Extensions and Improvements to Distribution System 10.8 Pumping, Treatment and Miscellaneous Improvements 9.6 Total Other Expenditures 47-1 15-.4 Total Expenditures 87.6 28.6 Debt Service 26.5 8.7 TOTAL REQUIRFE1N0TS 114.1 37. Sources of Funds Funds Available at Beginning of Construction Period 1.4 0.4 Funds Generated During Construction Period 52.7 17.2 Total Funds Generated 51.3 16.8 Capital Receipts 1i 2.7 0.9 Proposed IBRI Loan 20.8 6.8 Government Loans 31.0 10.1 Interdepartmental -Borrowing 4.0 1.3 Refundable Deposi-t-s 4.3 1.4 TOTAL SOURCES 14L.1 37.3 1| Consist of contributions from developers toward the cost of main extensions and contributions from the Singapore Housing Board (14$100 for each housing unit constructed by the Housing Board, higher than 80 feet above sea level if the housing unit is in the "high pressure" zone).  -21- 70. Besides the expenditures for the Johore River Project, other required capital expenditures (paragraph 61) would amount to Iv1$47.1 million during the construction period. 71. The proposed Bank Loan would cover about 50% of the project cost and 18% of the total requirements for funds during the construction period. Cash generated by the Water Department would cover 46% of the "total" requirements. Taking into account capital receipts, estimated at M$2.7 million, a shortfall remains of M$39.3 million of which government loans would cover N$431 million and internal loans from surplus cash generated by other departments of the Public Utilities Board, in fact the Electricity Department, would cover I$4 million. The remaining $14.3 million will be supplied by the Economic Development Board, Singapore, for the construction of a 48-inch main into the Jurong Industrial Area. This deposit will have to be refunded whenever revenues from sales of water supplied to consumers through this main exceed a certain level. It has been assumed that this will not be the case during the period for which projections are made, 1964-1972. 2) Financial Projections 72. The financial projections for the Water Department are based on the existing rate schedule and the estimated water consumptions given in Annex 5. Annexes 9, 10 and 11 show the income statements, cash flow state- ments, and balance sheets for the years 1958-1963, as well as the estimated statements for 1964-1972. The financial assumptions underlying these statements are described in Annex 18. 73. The new budget of the Central Government of Malaysia includes a propo- sal to extend to Singapore an existing Malaysian tax of 15% on fuel and lubricarts. Its main effect for the Water Department would be a possible increase in power costs in case the power tariffs wrould have to be raised as a consequence of this tax (see also paragraph 84). As the fuel consumption of the Water Department is relatively low compared to its energy use, any increase in operating expenses as a consequence of higher fuel costs would be less significant. 74. The financial projections for the Water Department call for the following comments and summation: a) "Other" revenues consist mainly of net income from service connection charges. b) The return on Average Net Fixed Assets in operation, which dropped to 3.7% in 1963 due to rationing, would be about 7.0% in 1964 and then decrease to 3.7," in 1969 following completion of the proposed project. Thereafter the return would gradually increase to 4.7% by 1972. At about that time, the second stage of the Johore River Works would be constructed and the return would drop again. (See also paragraph 77 for a further discussion of this rate of return). c) The ratio of operating costs, including adequate maintenance and depreciation, to total revenues would increase from 68% in 1965 to 76% in 1972.  -22- d) The debt service coverage would deteriorate from 2.5 in 1964 to 1.3 in 1969 and gradually increase to 1.6 in 1972. e) The debt/equity ratio would be satisfactory: 38:62 in 1964, 46:54 in 1967,decreasing to 31:69 in 1972. 3) Water Rates 75. In calculating the revenues for the financial projections the existing water rate schedule (paragraph 39 and Annex 6) has been used. 76. Average revenues from water sales are about IMW.85 per 1,000 gallons sold at the present time. Based on the estimates of future water consumption and continued use of the present water rates, the revenue from water sales would average about M$0.82 per 1,000 gallons in the period 1965-1972. 77. Considering the projections of revenues that would be produced by the existing water rate schedule in terms of the return on average net fixed assets in operation, the Water Department's return (paragraph 74b) would be low compared to the returns of the other trading departments and to the minimum 8% return required for the Board as a whole (paragraphs 51, 84, 85 and 89). Furthermore the interest the Public Utilities Board is paying on its long term debt to the government (5-3/4% per annum) would exceed this rate of return by a substantial margin. The Public Utilities Board has acknowledged the desirability of each utility department making a full contribution to the Board's financial results in order to achieve an overall rate of return of 8%, recognizing that at present the Water Department does not make an adequate contribution to this overall return and stating the Board's intention to adopt such measures as may be possible to improve the contribution of the Water Department. As an example of magnitude, an increase in average water revenues of 10% to about itO0.90 per 1,000 gallons would increase the average rate of return for the period 1965-1972 from 4.6% to 6.4%. The return of 3.7% in 1969, the lowest point, would then be 5.2% and the 4.7% in 1972 would improve to 6.6%. This indicates that a 10% increase would be a minimum. 78. Another reason why average water revenues should be raised is that, consistent with sound management of its financial affairs, the Board may find it necessary to increase the Viater Department's cash generating capacity to a sufficient level for the Department in order: (a) not to be dependent in the near future on any concessional interest rates in its borrowing from cash surpluses generated by the Board's other operations; and (b) to be able in the future to accumulate some cash surpluses of its own to apply toward the cost of major expansion projects. With a minimal increase in average water revenues of 10%, mentioned above as an example, the Water Department would be able to generate about M$21 million more during the period 1965-1972, which would decrease its need for government loans in the first years and obviate the need for internal borrowings in later years.  -23- 79. Before adjusting water rates to achieve an increase in the average water revenues, however, the Board should undertake a thorough rate study to determine the most equitable revisions and a reasonable program for imple- menting them. (Such a study also would be valuable as a check on the adequacy of the existing rate structure). When negotiating the proposed loan the Board informed the Bank that it expects the management consultants, in the course of their studies, to examine all factors affecting the Boardts financial operations including rates. In general, it appears that an increase in average revenues in the magnitude of 10% or greater could be made without undue difficulty. Serious consideration certainly should be given to raising the evidently subsidized domestic water rate of 14$0.60 per 1,000 gallons (paragraphs 39 and 40). Since domestic water consumption amounts to roughly 50% of total water sold, an upward adjustment in the domestic rate should improve average revenues significantly. An increase of one-third to M$0.80 per 1,000 gallons, for example, should result in an increase in average revenues of about 16-2/3%. There is no evidence to indicate that an increase of this order would be a hardship to domestic consumers; based on 1960 survey figures average water charges to lower and middle income families still would be less than 1% 1/ of average family expenditures, well within the limits considered reasonable for the cost of water. Another consumer category which would be reasonable to consider in terms of a rate increase would be govern- ment. Finally, in view of Singapore's objectives for industrialization, water charges to industrial consumers should be carefully studied, particu- larly since they are high in relation to the average cost of water and appear to be subsidizing other consumers. 8O. Programing water rate adjustments would be especially important. It is reasonable to expect that a first adjustment could be made soon since the Scudai works have coiiie into use, bringing a substantial improvement in the reliability of water service. (The last significant rate change was in 1956). Another change would be logical in 1967 or 1968 when the proposed Johore River Project would be finished. lJ Water supply services averaged 0.72% of family expenditures for roughly 20 gpcd at a rate of N$0.60 per 1,000 gallons. Even with no income increase, a 1/3 increase in water rates would bring average water costs to only 0.96% of income.  - 24 - B. FINANCIAL POSITION OF THE PUBLIC UTILITIES BOARD 1) Electricity Department 81. Financial data regarding the electricity department are given on Annexes 12 and 13; financial assumptions regarding these statements are mentioned in Annex 18 under B. All figures have been arrived at after a recent re-appraisal of the electricity operations of the Public Utilities Board. It was concluded that due to many uncertainties, projections beyond 1969 are not feasible. 82. Sales forecasts used as a basis for the financial projections, are believed to be realistic with one exception: sales to new industries, primarily in the Jurong Industrial Area. Construction of many factories in Jurong is not very far advanced and it is considered unlikely that con- sumption during 1965 and possibly the following years will be as high as forecast. As the surplus revenue per kwh from supplies to large industry is very small, the fact that the forecast may prove to be too high will not greatly affect the financial situation. 83. The planned capital expenditures for the period 1964 - 1968 amount to M$315 million and include the following projects: 1964 - 1969 (in millions M$) Pasir Panjang 1st stage 52 Pasir Panjang 2nd stage 41 Jurong Power Station (Total to be spent M$95.0 million) 59 Transmission and Distribution 163 Total 315 These expenditures are expected to be covered as follows: Existing IBRD Loan 337-SI M$36 million Government Loans M$67 million Other Foreign Exchange Financing M$74 million The remainder is to be covered by funds generated from operations. The existing Power Ioan (337-SI) amounts to M$445 million (US$15 million). Due to lower costs and foreign exchange requirements than originally foreseen it seems that the total amount to be withdrawn under this loan will not exceed 1M36 million. However, this is being investigated at present to determine whether other expenditures of up to M$4 million also will qualify for reimbursement under that loan; if so, this will decrease the need for government loans by the same amount. The other assumed foreign exchange financing includes an application for a second power loan by the Bank of 14$30 million.  - 25 - 84. The surplus of M$35 million, accumulated at the end of 1969 as shown on Annex 12 will be used to make pre-payments on the government loans. The electricity operations will result in a satisfactory rate of return increasing from around 10% at present to 12.7% in 1969. If the proposed fuel tax of 15% is put into effect (paragraph 73) and the power rates are not adjusted accordingly, total operating costs for the period 1965-1969 will increase about M$l15 million, resulting in a corresponding decrease of the surplus and a lower rate of return. 2) Gas Department 85. Financial data for the Gas Department are shown in Annexes 14 and 15. No appraisal of the gas undertaking has been made and the figures which underlie the calculations as reflected in these Annexes are based on sales, operating expenses and capital expenditures forecasts recently revised by the Finance Department in cooperation with the Gas Department. Some relevant financial assumptions are mentioned in Annex 18 under C. The total capital expenditures, planned for the period 1964-1969, amount to M$25.65 million. In addition to the government Loan of M$5 million, received in 1963, a further amount of M$15.5 million will have to be borrowed from the government. The projected rate of return on average net fixed assets in operation is satisfactory, increasing gradually from 9.6% in 1964 to 15.6% in 1970. 3) Overall Position 86. The overall position of the Public Utilities Board has been determined by combining the figures referring to the three trading depart- ments with those regarding the service departments. Financial assumptions regarding the service departments and the consolidated statements are given under D in Annex 18. The following table summarizes the overall financing plan for the Public Utilities Board for the period 1964 - 1969. Requirements for Fbnds Million M$ Million US$ Capital Expenditures 431.8 141.1 Debt Service 173.3 56.6 Other Requirements 23.3 7.6 628.4 205.3 Sources of Funds IBRD - Water Loan 20.8 6.8 IBRD - Power loan 35.5 11.6 Other Assumed Foreign Exchange Financing 74.3 24.3 Government Loans l13.0 36.9 Customer Contributions 9.7 3.2 Refundable Deposits 7.6 2.5 Other Sources 2.9 0.9 Funds Generated from Operations 398.5 130.2 Funds Available at the beginning of the Period 1.6 0.5 663.9 216.9 Surplus 35.5 11.6  -26- 87. Anrnex 16 shows overall pro forma cash flow statements and Annex 17 pro forma balance sheets of the Public Utilities Board on a consolidated basis. It is possible that starting in 1967 the Public Utilities Board would be able to finance part of the requirements for funds of the Water and Gas Departments with surpluses generated by the Electricity Department. Never- theless, it appeared to be prudent not to rely as yet on these funds as the time of these requirements might not coincide with the moment these funds would be available. Therefore, government loans up to M$7 million have been assumed for the Wlater and Gas Departments in 1967. Should these depart- ments be able to gear their capital expenditures for 1967 with the generation of surplus funds by the Electricity Department, these government loans would not be needed and consequently the surplus of i$35.5 million, which appears in Annex 16 at the end of 1969, would be lower by M$7 million. The remainder of the surplus probably would be applied to making prepayments on the govern- ment loans (balance as at the end of 1969: M$87 million). All these surplus amounts would be substantially lower if the proposed 15% fuel tax is levied and power and water rates are not increased correspondingly (see paragraphs 73 and 84). 88. The overall financial position of the Public Utilities Board is expected to remain sound. The debt service coverage should vary from 2.1 to 2.6 in the period 1964-1969. Under the Power Loan Agreement it has been agreed that the Public Utilities Board would not be allowed to incur an additional long-term debt unless the net revenue of the Public Utilities Board for any twelve consecutive months out of the fifteen months period last preceding the date of incurring such debt shall not be less than 1.5 times the maximum debt service requirements in any succeeding year. The same agreement has been maintained in the proposed loan for this project. 89. The rate of return on average net fixed assets in operation should increase from 8.4 in 1965, the lowest point, to 10.1 in 1969. This rate is above the minimum rate of return of 8% required under the existing proposed Loan Agreements. The debt/equity ratio shows a favorable trend, decreasing from 53:47 in 1965 to 43:57 in 1969. Prepayment on government loans would further improve this ratio.  - 27 - VII. JUSTIFICATION OF THE PROJECT 90. From a daily average of 32.5 MGD in 1950, water use in Singapore has grown by about 127% to 74.0 MGD in 1964, equivalent to an extraordinarily high average increase of over 6% per year. The principal reasons for a growth in demand for water of these proportions are: (a) the rapid population growth; (b) the continuous increase in the standard of living; (c) steady expansion of the water distribution network through- out the island; and (d) extension of the sewerage system. The Water Department should be credited for its past success in extending its distribution networks and expanding its sources of supply to meet this demand. 91. In spite of the Water Department's notable efforts, however, delays in the implementation of its long-range plans have caused the reliable capacity of the water sources to fall behind Singapore's water requirements since 1960 The productive caT.acity of these sources during dry periods in 1961 and 1963 was only about 60 MD, resulting in extended periods of water rationing to domestic consumers during those years. In the meantime, the water requirements in Singapore, now estimated at nearly 75 YND, continue to increase at about the 1950-1964 rate. 92. Expansion and improvement projects now in progress (on somewhat of a "crash" basis) should be completed by 1966. These would increase reliable productive capacity to about 102 MD which should be capable of preventing water shortages until about 1968. The proposed Johore River Water Supply Project, planned for completion by 1968, is necessary in order to prevent recurrence of water supply deficiencies at about that time. The proposed project would increase reliable water production capacity of the system to about 132 MGD which should be adequate until sometime between 1972 and 1977. Furthermore, the proposed new water source and plant would be suitable for periodic future expansions enabling the Water Department to meet Singapore's increasing requirements for many years. 93. A number of alternative solutions to Singapore's water supply problems have been studied; none have been shown to be more technically or economically feasible or to have more long-range potential than the proposed Johore River Project. 94. Alleviation of its present and foreseeable water shortages is vital to continuance of Singapore's negligible incidence, in recent years,  - 28 - of diseases commonly attributed to inadequate or contaminated water supplies. A mild outbreak of cholera in 1963 followed several months of water rationing. While there is no evidence implicating the water system directly, this occurrence emphasized the potential danger that such an outbreak could spread to major proportions in the increasingly dense population of Singapore with the poor sanitation conditions in- herent to water shortage and rationing. 95. Commercial and industrial water uses, though fairly constant in recent years, still constitute about 20% of Singapore's water require- ments. With the government's program of encouraging industrial develop- ment in Singapore, industrial water requirements are expected to increase materially during the next ten years. The Jurong Industrial Area alone is expected to increase its requirements for water from the public system from about 1 N3D in 1964 to perhaps 10 MGD in 1972. Ultimate require- ments for Jurong industries have been estimated as high as 35 to 70 MGD. Alternative water supplies of reasonable quality for industry in Singapore are not competitive with the public system either in availability, cost or reliability. Therefore, the proposed project is important as a means of raising water service to a level adequate to support the industrializa- tion program of Singapore. 96. Together with other improvements to the water system, planned or in progress, the proposed project would remove major deficiencies in Singapore's fire fighting potential. 97. For the above reasons, the proposed water supply project fits into Singapore's development programs and is expected to be an important contributory factor in carrying out its plans for economic development and for improvement of living conditions. The Government of Singapore gives this project a high priority.  - 29 - VIII. CONCLUSIONS AND RECOMMEIDATIONS 98. The proposed project is required in conjunction with Singapore's program of public expenditures to facilitate and encourage industrializa- tion and to improve housing and living conditions. That program conforms to the needs of Singapore's economy and, within that program, the proposed project is of high priority to the Government of Singapore (paras. 16, and 94-97). 99. The project is economically and technically sound and is well planned to meet Singapore's increasing water supply requirements. Alter- native economic sources of water to meet such requirements are not avail- able (paras. 59, 60 and 92-93). 100. The cost estimates and financing plans for the proposed project are reasonable (paras. 63, 64 and 69-71) and the schedule for implementa- tion is realistic (para. 67). The present and prospective financial con- dition of the Public Utilities Board is sound (paras 86-89). However, consistent with sound management of its financial affairs, the Board prob- ably will find it necessary in the near future to increase average water revenues by not less than 10% through adjustments to the water rate schedule. While any such adjustments should be based on a comprehensive rate study, it is evident that there is ample latitude for equitable rate changes which could be implemented on a reasonable schedule without undue difficulty (paras. 39, h0 and 77-80). 101. In somewhat more than a year of existence the Public Utilities Board has been unable to establish capable, effective management or to correct serious deficiencies in its professional staff. However, subject to the conditions set forth below the Board would be a suitable borrowTer. (paras. 33-37 and 68). 102. Although the proposed loan would be made to the Public Utilities Board and guaranteed by Malaysia, supplementary agreement between the Bank and the State of Singapore would be obtained. As agreed with representatives of the Government of Singapore these assurances would relate to matters that would be more directly the concern of the State Government than of the Central Government such as performance, access, supply of information , state taxa- tion, provision of additional funds that may be necessary to complete the project and confirm that agreements with the State regarding management in connection with the Power Loan Agreement would apply as well to a loan for this project (paras. 5, 6, 9, 10, 13, and 71).  -30- 103. During negotiations, agreement was reached on the following: (a) The Board would engage a firm of management consultants, accept- able to the Bank, to conduct a comprehensive analysis of the Board's organization, management and operations and to recom- mend nreans of correcting or forestalling any existing or pros- pective deficiencies and the Board would consider the consultants' recommendations in consultation with the Bank with a view to taking such action as may be agreed between the Bank and the Board; (b) Any future appointments to the positions of General Manager or Chief Water Engineer would be made only after prior consulta- tion with the Bank; (c) The rates and charges levied by the Board for water supply, gas and electricity services would produce revenues adequate to cover operating expenses, including taxes, if any, maintenance, interest payments on borrowings, depreciation, debt repayments and sinking fund contributions in excess of depreciation and to create reasonable reserves (para. 89); (d) The Board would not incur any long-term indebtedness unless its net revenues for any twelve consecutive months out of the fifteen-month period last preceding the date of such incurrence shall not be less than 1.5 times the maximum debt service requirements on all the Board's long-term indebtedness (including the debt to be incurred) in any succeeding fiscal year (para 88); (e) The Board would undertake a comprehensive study of its system of primary water supply and distribution mains and to develop and implement any long range improvement program which would be necessary for effective utilization of the water supplies available upon completion of the proposed project (paras. 21, 23, 36 and 61); (f) The Board would implement certain improvements to its existing supply, treatment and pumping plants and to their operation in order to increase, in the most economical manner, the reliable yield of its existing sources (paras. 55, 61 and 92, and Annex 4). On the above basis, the proposed project provides a suitable basis for a Bank loan of US$6.8 million equivalent to the Public Utilities Board of Singapore for a period of 20 years including a four year grace period. January 6, 1965  SINGAPORE, MALAYSIA JOHORE RIVER WATER SUPPLY PROJECT ORGANIZATION CHART -PUBLIC UTILITIES BOARD |MEMBERS OF THE BOARD INEEDN S SECR ETARIAT ERAL----------------------- ADMINISTRATIVE PERSONNEL AND l SECTION IWELFARE SECTION| l WATER | | ELECTRICITY l l GAS l FINANCE ARCHITECT'S TRANSPORT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT (Chief Water Engineer) (Chief Electrical Engineer) (Chief Gas Engineer) (Chief Financial Officer) (Chief Achitect) X OESIGN l X GENERATION l A DESIGNMAIN ACCOUNTS _ CONSTRUCTION | DISTRIBUTION MANUFACTURE INCOME ACCOUNTS CONSUMERS' MECHANIZED A SUPPLY l X ENGINEERING l X DISTRIBUTION l ACCOUNTING X DISTRIBUTION l X PUBLIC LIGHTING | X ECONSUMERS' CENTRALIZED PUBLIC LIGHTING ENGINEERINGMETR READING X DMNITRTINSTREX TORES lPAYMASTER X ADMINISTRATION | H ADMINISTRATION AUDITING TRADING - SERVICE NOTE Matters mvolving financial implications are referred to the General Manager and the Board through,or in coaperation wrth,the Chief Financial Officer z t4BRD - Ecanomic Staff m 2245  SINGAPORE, MALAYSIA JOHORE RIVER WATER SUPPLY PROJECT ORGANIZATION CHART - WATER DEPARTMENT WATER DEPARTMENT DESIGN CONSTRUCTION SUPPLY DISTRIBUTION ADMINISTRATION DRAWSNGI IMPOUNIIN j INVESTIGATIONS 1 OFFICE RESERVWING| IMPOUNDIRS MAINS SEACCOUNTION SECTION TREATMENT SERVICE ACUT L_~PLANNING _ SUPERVISION WORKS CONNECTIONS ACCOUNTS CORRESPONDENCE PUMPING METER FINANCIAL TENDERS/ STATIONS F TESTING ESTIMATES CONTRACTS BOOSTER WASTE VEFRIFICATIOLANTSONS STATIONS DETETIONOF PAYMENTS APIAIN MAINS ~~~MECHANICAL 1 L DE T MAINS l WORKSHOP j STORES COMPLAINTS SERVICEMER 0 RESERVOIRS l 0 STANDPIPES SERDS METER INVESTIGATION STATISTICS WORKSHOP l d COMPLAINTS STAFF QUARTERS PERSONNEL SCHOOL DISPENSARIES IBRD - Econom,c Staff 2246 1m  ANNEX 2 Page 2 Singapore, Malaysia Johore River Water Supply Project ORGANIZATION OF THE WATER DEPARTIMENT The Wlater Department is under the control and management of the Chief Water Engineer who is responsible to the General Manager and the Board for the efficient administration of the Department. It comprises five main branches namely, Administration, Planning & Design, Construc- tion, Supply and Distribution. It has an establishment of 375 monthly- rated and 1,600 daily-rated staff. Briefly, the functions of the 5 branches of the Water Department are summarized below: Administration: This branch is divided into the Accounting and Secretarial Sections. The former, under the charges of an accountant (seconded from the Finance Department), is responsi- ble for all accounting procedures, the preparation of annual estimates and the keeping and finalizing of accounts. It also verifies all payment of bills, wages and salaries and maintains overall supervision of all stores and store personnel. The latter, under the control of the Secretary, is responsible for the day-to-day conduct of Water Department business relating to correspondence, tenders, contracts, and compliance with the various ordinances anc regulations relating to the employment and control of labor and staff. Planning and Design: This branch is responsible for the design, investigation and planning of major new works. It is under the control of a senior civil engineer. Construction: Also under the charge of a senior civil engineer, this branch is responsible for the construction and supervision of all major new works including main pipelines. It also con- trols a drawing office comprising 18 draughtsmen, surveyors and ancillary staff. Supply: Under the control of a senior civil engineer, this branch is responsible for the production and supply of water. This includes collection, filtration, treatment and storage of water. It controls the various impounding and service reservoirs, filtration and treatment works, pumping stations and supply mains. It maintains a workshop for the maintenance and repair of measuring devices and chlorinators and other chemical dosing machines used at treatment and pumping plants. It also maintains a crew of mechanical engineers and technicians whose work is to erect, maintain and repair all mechanical plants and pumping units. December 1964  M\JJEX 2 Page 3 Distribution: Also under the control of a senior civil engineer, this branch is responsible for the distribution of water from the stage when water leaves the service reservoirs or when water leaves the pumping stations if there is no reservoir. For the purposes of distribution, the Island of Singapore is divided into three divisions, viz: East, Central and WVest. Each division is further sub-divided into 2 districts and is under the charge of and Assistant 4ater Engineer. The Distribution Branch lays and maintains all distribution mains either with its own staff or under contract. It also approves and supervises installation of new services. It installs and repairs meters and deals with all applicaticns for water services and complaints frorim consumers regardLng high consumption, poor pressure, etc. The Dranch maintains a waste detection unit and a mechanical workshop. December 1964  SINGAPORE POPULATION TRENDS JOHORE RIVER WATER SUPPLY PROJECT 5 I / // / 4.4% PER ANNUM / 'LEGEND: * Census dato 3.5% PER ANNUM / X Estimate by Dept of Statistics / ZU, USED FOR DESIGNN/ ' ] 3 1 / , _j 3 Z 0/ FORECASTS Z / PREPARED BY , DEPARTMENT OF STATISTICS 0~ ISLAND OF SINGAPORE _ 1,733,000 1,446,000 I 0 * CITY OF SINGAPORE (912,000) 0 BALANCE OF ISLAND (534,000) O I I I_ - 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 YEARS > NOTE 1957 and later populations exclude foreign transients, Armed Services personnel and their fomilies estimoted at 30,800 IBRD-Economic Department December 1964 (R)2247 - x  .111W L R Page 2 Singapore, Nala-Ysia Johore River Water Supply Project POPULATION TRENDS Censuses and Estimates of Population by Department of Statistics, Singapore Total Year Residents Remarks (thousands) 1871 97.1 Census 1881 137.8 It 1891 181.6 It 1901 227.6 tt 1911 303.3 it 1921 418.4 of 1931 557.7 It 1937 651.5 Estimate 1941 769.2 11 1947 938.1 Census 1952 1127.0 Estimate 1957 1445 9 Census 1961 1687.3* Estimate 1962 1732. 8* 1 Breakdown of 1957 Census: Residents City of Singapore 912.3 Other Districts 533^6 Total Residents 1445.9 Non-Resident Foreign armed service personnel their families and transients 30.8 Total 1476.7 * Excludes foreign transients, armed services personnel and their families. POPULATION FOHECASTS (Thousands) - LXCLUDDf'G FOREIGN T.LAA4SIENTS, PUd~ID SERViCES PERSOMNEL AND THEIR FAN1ILIES April 1961 Forecasts by Singapore Department of Statistics Natural 1% Reduction 2% Reduction At Overall Increase per year in Per Year in 1947-1957 Year 1947-1957 Natural Increase Natural Increase 3/ rate Used for design after 1962 1962 1,714 1,714 1,714 1,733 1967 2,017 2,008 1,999 2,150 1972 2,384 2,342 2,301 2,670 1977 2,841 2,733 2,627 3,314 1982 3,407 3,187 2,966 4,115 1987 4,058 3,697 3,308 5,106 1992 4,789 4,277 3,643 6,341 iJ Average increase = 3.5'%O per annum; net immigration = 0.9% / This is equivalent to average increase of about 3.0% per annum. 2 This is equivalent to an average increase of about 2.5% per annum. * Average increase = 4.4,% per annum including 0.9% net immigration. J Latest estimate of 1962 population made by Department of Statistics. December 1964  ANNEX 4 Page 1 Singapore, Malaysia Johore River W-ater SuDply Project TECHNICAL DESCRIPTION OF EXISTING WATER SUPPLY SOURCES Water Sources, Existing or Under Development Singapore obtains its water from a combination of sources on the Island and on the mainland in Johore, Malaysia (Map 1). Practically all of the water obtained from the island sources comes from adjoining, pro- tected catchment areas which feed TrAxee reservoirs - MacRitchie, Pierce and Seletar (Table 1). Impounded water from Seletar Reservoir is pumped to Pierce Reservoir. Water from Pierce is piped (by gravity flow or pumped, depending on the reservoir water level) to the Woodleigh Treat- ment Works and the water from NacRitchie Reservoir is pumped to the Bukit Tamah Treatment Works. A very disappointing groumdwater source at Bedok in the eastern part of Singapore Island, with a dependable capacity of only about 1.0 MGD, supplies the balance of the water obtained from the island; the water is treated at the Bedok Treatment Plant. Table 1 - Reservoir Capacity Capacity as % of Reservoir Catchment Average Annual Source Capacity Area Precipitation (MG) (acres) Island - MacRitchie 80G+ 1,900 19 Pierce 800+ 2,700 13 Seletar 100+ 2,700 1.7* Bedok 0 - Johore - Pontia 2,000 3,015 25 Gunong Pulai 1,100 1,54o 26 Pulai III 55 470 h43 Pulai I 50 1,333 1.4* Tebrau 0 30,700 0 * Scudai 0 47,400 0 * The mainland water sources consist of both reservoired and river extraction supplies. The reservoir supoly is derived from two general catchment areas centered on Gunong Pulair in southwestern Johore, The yield of the Pontia reservoir is pumped to join the yield from Gunong Pulai, Pulai I and Pulai III Reservoirs for treatment at the Gunong Pulai Treatment Plant before a 30-mile transmission to Singapore by gravity flow. The Tebrau * Under-reservoired in relation to catchment areas. December 1964  ANNEX 4 Page 2 and Scudai Rivers are the existing river sources in Johorell The Tebrau water is treated at the Tebrau Treatment Plant before being pumped about 21 miles to Singapore. Although the catchment area totals about 48 square miles, and the rated capacity of the works is 30 MGD, there is no storage, and the dry weather reliable yield is limited to only about 10 MGD. 30 MGDD works required for a new source on the Scudai River were recently com- pleted. Again, lack of storage will limit reliable dry weather yields to about 19 MGD. Table 2 summarizes existing water sources in terms of the rated capacities, average yields during normal rainfall years and reliable yields during dry periods. Combined Yield of Water Sources The sum of the reliable dry weather yields from each of the existing sources (excluding Scudai) is only 43 GDD. The "Combined Reliable Yield" of these sources, however, is greater than this because the most adverse weather conditions seldom occur simultaneously on all catchments at the same time. Also, by carefully intergrating the opera- tion of the various sources, water in storage can be conserved until non- reservoired sources begin to dwindle in dry weather. The "Combined Reliable Yield" of the existing sources is therefore assessed to be about 60 MGD. A number of "Improvements Projects", in progress or planned, will increase this yield to about 83 MDo The Scudai project adds another 19 1MGD. Table 2 - Yield of Existing Sources (MGD) Normal Rainfall Dry Wleather Rated Conditions Combined Reliable Yields Capacity Average Individual With of Present Reliable At Improvement Source Works Yield Yields Present Projects - Island Reservoirs 233/ 18.5 14 23 h6 Bedok 5 0.5 1 1 1 Johore Reservoirs 26 20.0 18 26 26 Tebrau River 30 30.0 10 10 10 w ~~~9 .0 45 ro 5 Scudai River (under construction) 30 - 19 19 19 114 69.0 62 79 102 1/ Abstraction from the river is authorized by the "Tebrau and Scudai Rivers Water Agreement" of September 1, 1961 between Singapore and Johore. 2/ New mains or improved pumping and treatment facilities at existing plants. 3/ Woodleigh at 13 MGD and Bukit Timah with one pump operating at about 10 MYGD. December 1964  ANNEX h Page 3 Treatment Plants The raw water treated at each of the five existing surface water treatment plants is fundamentally the same in character - pH value between 5.5 and 6.5 (slightly acidic) and virtually zero hard- ness - and there are no major differences in the treatment applied. In some cases, the water is limed upon leaving the reservoirs to raise pH and protect concrete pipes and structures. The basic process is clarification with the assistance of an aluminum floc. A variation at the Tebrau and Scudai plants consists of the addition of activated silica which greatly increases the effectiveness of the clarification process at that plant. In general, for all plants except Scudaill, the coagulants are dosod into an inlet channel which carries the water to upward flow flocculation tanks. From these, the water passes to upward flow clarifiers. In essence, the rectangular clarifiers utilize a type of sludge-blanket system. The water enters through slotted pipes along the tank bottoms, flows up through the sludge and discharges into a relatively few longitudinal collecting troughs at the water surface. For the most part, the collecting troughs are overloaded and a certain amount of aluminum floc is carried out of the clarifiers. The accumulated sludge is removed from the clarifiers by emptying and hosing down the tanks periodically (two to six week inter- vals) although at Gunong Pulai there are facilities for drawing off the sludge while the tanks are in operation. After clarification, the water is again dosed with lime and then filtered through high rate filters. The filtration media is com- paratively uniform and coarse and filtration rates are as high as 4.50 gallons (U.S.) per minute per square foot of filter area. Filters are back flushed and surfaced hosed for cleaning. Wlater used for filter washing and for cleaning the clarifiers amounts to about 1 1/2 to 2 1/2% of the water treated. After filtration, the water is chlorinated in the presence of ammonia and is fluoridated. Before pumping into the distribution system the pH is adjusted with lime as necessary to reduce corrosiveness. It should be noted that the older Singapore plants incorporate certain features which are unusual compared with modern water treatment practices. The flocculation and clarification tanks in particular appear to be somewhat uneconomic as to the volume of tanks in use for the amount of water treated. On the other hand, the rapid sand filters appear to be able to turn out water of adequate quality at very high loadings. The existing plants are reasonably well maintained and generally are in good condition. One exception is that the condition of some exposed concrete surfaces indicates a poor design of concrete mixes or poor workmanship. 1/ Scudai utilizes essentially the same clarification process in one half the plant and so-called "mechanically agitated, accelerated sludge blanket" clarifiers for the other half. December 1964  SINGAPORE, MALAYSIA TRENDS OF WATER PRODUCTION AND USE JOHORE RIVER WATER SUPPLY PROJECT AVERAGE FLOW - MILLION GALLONS PER DAY (MGD) 200 I TTT1 , I Ir, I,,, * , MOST PROBABLE RANGE OF ESTIMATED TOTAL PRODUCTION REQUIREMENTS , 180 - __ __ - ,_ _ . /' FUTURE EXPANSION OF SUPPLY WORKS--._ _ // .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ {/ 160 ___ _ _ ____ _____, -_ 140 - - P U W'S MAXIMUM ESTIMATE OF WATER PRODUCTION REQUIREMENTS 132 MGD* _ l I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.....;.; , ,. ,.. 120 P R RIVE __O _CT_| ._ / , , -ESTIMATED TOTAL WATER PROPOSED JOHORE RIVER PROJECT ll. X , ., - . PRODUCTION USED FOR I ~~~j/ - - ~~~FINANCIAL PROJECTIONS 102 MGD / o.,' 100 ............._ _ _ _ __OA_ I oo _ ._ ..... *-- - -73- ' ESTIMATED TOTAL WATER SALES .. I ,/^#,o USED FOR FINANCIAL PROJECTIONS IMPROVEMENTS NOW UNDERWAY INCLUDING SCUDAI -. O, 80 WATER SHORTAGES 1961 AND 1963 * -- I I RELIABLE YIELD OF RANGE OF ESTIMATED DOMESTIC COMBINED SYSTEM DURING -W_ _ g J SINGAPORE ISLANDT _ 60 DOTAERY 1PERIODSUCTIONS__ -.. - 60 MGD , ,^SUSED FOR FINANCIAL PROJECTIONS 40_ _ _ \ _ _ _ _ _ _ _ -42 _ _ _ _ . - _ - I _ _ _. 32 MGD DOMESTIC U -RANGE OF ESTIMATED REQUIREMENTS ................... ................i2MD..., ....... ,., ....................... . F RIDUMSTRIAL U__,RANGE COFMSTMAEORCOIREMNT 20 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ J ~~~~~~LWTRUSE, SINGAPORE ISLAND 20 _ r --~ t- INDUSTRIAL AND COMMERCIAL USE 0 I I I I , I I I I I I I I I I I I 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 '82 YEARS IBRD-Economic Deportment rZ (R)2248 x  SINGAPORE, MALAYSIA JOHORE RIVER WATER SUPPLY PRDJECT PAST WATER PRODUCTION AND USE Sales to Unaccounted Total Water Domesticqg Conmmerce/Industr J Government Johore Ibtal Water So14 For Pumped Year MOD 2 MD MGD GPCD2/ MGD MGD R3D H G MD M=CD) ]9A9 11.72 11,2 8.34 7.9 7.31 7.0 1.2 28.59 26,1 2.71 31.0 8 1950 11.97 9.59 7.43 1.3 30.28 2.29 32.57 11.1 8.9 6.9 26,9 29.0 1951 12.23 10.66 8.48 1.4 32.75 2.88 35.63 11.0 9.6 7.6 28.3 30.9 1952 13.64 11.46 8.98 1.5 35.59 2.86 38.45 11.8 9.9 7.8 29.4 31.9 1953 16.24 11.95 9.01 1.7 38.95 3.15 42.10 13.4 9.9 7.5 30.7 33*3 1954 18.32 12.31 9.53 1.8 42.00 3.44 45.44 14.4 9.7 7.5 31.6 34.3 1955 21.08 12.68 10.16 2.2 46.17 3.89 50.06 15.8 9.5 7.6 33.0 35.9 1956 22.94 i2.96 10.42 2.6 48.90 4.60 53950 16.4 9.3 7.4 33.1 36.4 1957 23.59 13.57 11.67 2.6 51.41 4.58 55.99 16.0 9.2 7.9 33.1 36.2 1958 26.10 13.78 12.54 2.8 55.18 4.51 59.69 16.9 8.9 8.1 33.9 36.8 1959 28.85 13.17 13.37 2.3 57.72 5.28 63.00 17.9 8.2 8.3 34.4 37.7 1960 31.96 13.09 14h4a 3.4 62.55 5.30 67.85 19.2 7.9 8.5 35.5 38.7 1961 31.34 12.85 13.17 3.5 60o81 4.80 65.61 18.2 7.5 7.7 33.4 36,2 1962 32.57 13.47 13*63 3.8 63.45 6.16 69.61 18.5 7.6 7.7 33.8 3703 1963 28.72 12.01 11417 4.14 56.Q4 5.06 61.10 15.8 6.6 6.2 28.6 31.4 Domestic Connections, mirnimum allowances, housing board, public standpipes and latrines. ( . Based on total census or estimated population of Singapore includin transients. Excludes water sold to Johore. / Water processed for sale, water not processed for sale, Tebrau Rubber Estate and sales to ships. December 1964  SINGAPORE, MALAYSIA JOHORE RIVER, WATER SUPPLY PROJECT ESTIMATED FUTURE WATER PRODUCTION AND USE (Million Gallons Per Year) 1964 1965 1966 1967 1968 1969 1970 1971 1972 Domestic Consumption Domestic Connections 10,500 11,375 12,217 13*100 14,043 15,036 16,089 17,212 18,395 Minimum Allowances* - - - - -_ - _ Housing Board 260 285 303 320 337 354 381 398 425 Public Standpipes and Latrines 2,300 2.540 2.540 2.540 2.540 2.540 2.540 2.540 2.540 TOTAL DOMESTIC CONSUNPTIDN 13,060 14,200 15,060 15,960 16,920 17,930 19,010 20,150 21,360 (Avg. MGD) (35.8) (38-9) (41.2) (43.7) (46.4) (49.1) (52.1) (55.2) (58.5) Commerce and ILndustry Shipping 350 360 380 400 420 440 460 480 500 Water Processed for Sale 260 276 285 293 302 310 320 330 342 Water MDT Processed for Sale 4,450 4,690 4,950 5,221 5,511 5,820 6o139 6,468 6,833 Tebrau bber Estate 4 -4 4 4 5 - 5 5 TOTAL COMKERCE AND INIUSTRY 5,064 5,330 5,619 5,918 6,237 6,575 69924 7,283 7,680 (Avg. HGD) (13.9) (14.6) (15.4) (16.2) (17.1) (18.0) (19.0) (20.0) (21.0) Government Public Utilities Board, General aovernment and Armed Services 5,200 5,520 5,700 5,880 6,o70 6,270 6,470 6,670 6,900 Johore 1,590 1,690 1,790 1,890 2,010 2,130 2,260 2,390 2D520 TOTAL WATER SALES 24,914 26,740 28D169 29,648 31D237 329905 34,664 36,493 38,460 (Avg. M3D) (68.2) (73.2) (77.2) (81.2) (85.6) (90,1) (94.9) (100.0) (105-3) Used by Water Department and uimccounted-for 2,146 2,340 2,451 $,572 2,673 2,815 2,946 3,097 3,260 TOTAL WATER PRODUCED 27,060 29,080 30,620 32,220 33,910 35,720 37,610 39,590 41,720 (Avg. HCD) (74.1) (79.7) (83.9) (88.3) (92.9) (97.9) (103.1) (108.5) (114.3) * Abolished as separate category starting 1964. December 1964  ANNEX 5 Page 4 Singapore. Malaysia Johore River Water Supply Project BASIC ASSUMiPTIONS FOX ESTIMATING FUTURE WATER PRODUCTION jiND SAILES AS USED FOR THE FINANCIAL PAiOJECTIONS Population Served 1. The total population of Singapore (Annex 3) has been used as the basis for analyses of past trends in water use and estimates of future water requirements, since, for many years, nearly 100 per cent of the island's population has been served by the public water system. Detailed analyses and estimates based on the subdivision of the total population in terms of the type of water service received appear to be unnecessary (although some computations of this type have been used as checks). Past trends in tota'l water used in the various categories which have a strong relationship to population are well established and documented. Generally, the appraisal mission expects that: (a) the factors which relate such water use categories to the numbers of people (such as housing and economic improvement) will continue past trends at least through the period for which financial projections for this project are made; (b) no new factors will seriously upset this relationship during this period arid; (c) there- fore, total population is an adequate parameter for estimating the major portion of Singapore's water requirements for the purposes of these projections. Domestic Water Consumqption 2. The total water use by the various types of domestic service shown on page 2 of this Annex is estimated to increase at the average rate of six per cent per year betw,een 1962 and 1972. This is equivalent to an average population increase of three per cent per year (Annex 3) and an increase in overall per capita water use for dornestic purposes averaging about 0.625 gpcd each year (from 20.3 gpcd in 1965 to 25.0 gpcd in 1972). The appraisal mission believes that this estimate, which has been used for the purposes of the financial projections, is conservatively low. 3. Actual average per capita increase between 1949 and 1962 was 0.56 gpcd per year and between 1949 and 1960 it was 0.73 gpcd. The general water shortage since 1960 has required water restrictions and accounts for the difference in these past averages as well as for the low0r domestic consumption figure for 196 1. Starting in 1964, this shortage is expected to be alleviated by works in progress or plannpd.. J Also a slightly lori figure for 1964. December 1964  AMMEX 5 Page 5 4. For use T.Iith the schedule of charges for Twater services, total estimated domestic use is divided into the categories showin on page 2 of this Annex, tiIinimum allowances"' was abolished as a separate category in 1964 and has been combined w.ith wviater use at dDmestic connections. Wlater sales to the lHousing Board are assumed to increase at 6% per year. The total of water use at domestic connections and at public standpipes and latrines also is estimated to increase at 6% per years however, water use at standpipes and latrines is assumed to peak at the i965 level and remain constant thereafter so that use at domestic connections would increase at a rate somewhat higher than 64. Commerce and Industry 5. Shipping: 'later sales to shipping have fluctuated betwieen about 0,9 and 1.25 NM since 1952 and are nDt expected to change drastically by 1972. In 1963 sales declined to 1.2 MGD and are estimated at 0.96 MGD for 196L. A gradual token increase is assumed so that sales to shipping are sho.in at an average rate of about 1.4 MD in 1972. 6. W4ater processed for sale: Since 1950 this category has fluctuated between 0.37 and 0.U5 gpcd and averaged about 0.4 gpcd. This average is assumed to continue to 1972. 7. Water used for Comnnerce and Industry but not processed for sale has averaged between 11 and 12 ivBD since 1954 and has steadily eclined on a per capita basis since 1953. From this it would be possible to assume that future requiremnents cDuld remain relatively constant at about 12 I4GD. On the other hand, because of the industrialization plans for Singapore, the Water Department has estimated that as much as 42 MGD of industrial water could be required from the public system by 1972, including 25 MGD in the new Jurong Industrial Area. In the meantime, the Economic Development Board has undertaken an industrial water supply system for Jurong utilizing some local surface wiater plus treated effluent from a sewage treatment plant. When completed in 1965, this supply will have an estimated capacity of over 10 YiGD, expandable to more than 20 IZGD. Consequently, the financial projections from 1964 in this appraisal are based on only the average increase in sales by the W.iater Department to commerce and industry between 1949 and 1958 - 5.5% per year reaching about 19 MGD in 1972. 8. On the basis of the above assurmptions, overall water sales for industry and commerce would increase from about 13.9 MGD in 1964 to about 21.0 !1GD in 1972; on a per capita basis this would amount to an increase from about 6.6 gped in 1964 to 900 gpcd in 1972. Government 9. Since 1951, Twiater sales to gDvermment (including the armed ser- vices but excluding public hydrants and latrines) have fluctuated in the range of about 8 gpcd. For the financial projections it is assumed that government use will continue, proportionate to population, at 8 gped. December 1964  AMEX 5 Page o Johore 10. 'later sales to the Johore Government for distribution in its water system have become an imoortant cetegory. The Vater Department expects that the Johore population served and per capita use will increase proportionally to the domestic water use in Singapore through 1972. There- fore, sales to Johore are assumed to increase at 6% per year reaching a level of about 6.9 MGD in 1972. Unaccounted-for Water 11. Since 1949, water produced but for trTich there is no revenue (such as water lost through leaks and under-registration of meters or used by the Water Department to flush water mains, etc.) has fluctuated between 7 and 9% of total production. For these estimates an average figure of about 8,5, has been used. While this is a very low figure for a public water system, it has been maintained steadily in Singapore for nearly 15 years and tthe appraisal mission believes that it is an appropriate basis for estimating non-revenue water0 December 1964  SINGAPORE, MALAYSIA JOHORE RIVER WATER SUPPLY PROJFCT SCHEDUL,E SHOWING CHANGES IN WATER RATES - 1948 TO 1962 1951 1951 1951 Clause BATE PER 1,000 GALOlO:- 1948 1949 1950 JanF. ar./ Meyl 1952 1955 1954 1955 1956 1W57 1858 1959 1860 151 1962 Feb. April Dec. I Supplies to Sbipping & Water Boats $2.00 $2.00 52.00 82.00 62.50 S2.50 $2.50 *2.75 S2.75 *2.75 S2.75 $2.75 *2.76 S5.75 *5.75 U3.75 $5.75 2 Domestic supplies to premises inside City Limits of shophouse class -.40 -.40 -.40 -.40 -.40) 5 Domestic supplies to premises inside Ci) -.50 -.50 -.55 -.56 -.55 -.60 -.60 -.60 -.60 -.60 -.60 -.60 Limits other thsn under Clause 2 -.55 -.55 -.55 -.56 -.66 4 Supplies to preises outside City Limta other than under Clauees 1, , 6 & 7 -.85 -.85 -.85 -.85 -.85 -.85 -.85 -.865 -.85 -.85 -.60 -.60 -.60 -.60 -.60 -.60 -.60 6 Water processed for sale (Aerated Water Coys., Brewerieo, Dietilleries, Lee end Sauce Factories, eto.) $1.75 $1.75 61.75 $1.75 $1.75 $1.75 $1.90 62.00 *2.00 $2.00 *2.00 62.00 *2.00 *2.00 S2.00 *2.00 F $2.00 6 Water used for trade or manufacture but not processed for sale *1.00 $1.00 $1.00 *1.00 $1.00 $1.00 16 $1.30) $ SLN SLoe B1.50 61.50 $1.50 $1.50 $1.so $1.30 S1.S0 81.50 7 Supplies to Hotels, Bosrding Houses, Coffee Shops, Amusement Perks, etc. -.85 -.55 -.85 -.55 -.55 -.85 *Lo. SL10) SPECIALTRF Singapore Governmnet, Armed Services and Housing & Development Board (Rate varies eaoh year - Baais: previous years production cost plwD 2 cents per 1,000 gallons) -.55 -.57 -.58 -.62 -.52 -.62 -.68 -.78 -._0 -.85 -.5s -.78 -.79 -.79 -.77 -. 73 -.79 City Council Depts./P.U.B. (Rate varies each year - Basis: at previous year's production cost). -.56 -.55 -.58 -.60 -.60 -. 60 -.66) -.76 -.78 -.85 -.85 -.76 -.77 -.77 -.75 -.71 -.77 SwviAing Pools (RavW ater) -.07 -.07 -.07 -.07 -.07 _.07 _.07) Johore Government (Rate fixed by Special Agreement) -.25 -.25 -.25 -.25 -.25 -.25 25 - -25 -.2 6 -.60 -.50 -.50 60 -.50 -.60 -.50 -.50 - - - - - - - -.55 _._ _.5 - -.56 -.35 _555 klizniw Charges (according to size of asters ranging from 80 cents to $40.00 per month)  ANN1JiX 7 Page 1 Singapore Malaysia Johore River Water Supply Project TECHNICAL DESCRIPTION OF PRiOPOSED PROJECT Alternative Water Supply Projects Considered The proposed Johore River project was selected on the basis of engineering studies of a number of alternative means of meeting Singapore's long-range water supply requirements. Among the possibilities considered on Singapore Island were development of additional wells and catchmnent areas and expansion of the storage capacity of Seletar Reservoir. However, full development of all of these possibilities together would contribute only about 25 I'iGD of reliable yield - a small amount compared to Singapore's overall requirements for additional supplies. Furthermore, in terms of cost per unit capacity, these additional island sources would be expensive in comparison with alternative schemes. The additional catchment areas which would contribute most of the new supply would also have the disadvantage of being scattered about the island on land considered to be valuable for housing and industrial development. The only real alternative to the Johore River project would be the Johore Strait Scheme, involving replacement of salt water with fresh water between two dams across the strait. Compared to the Johore River project, this scheme has not been thoroughly studied and a numiber of related problems have not been fully evaluated and resolved. Even under these conditions, the most optimistic preliminary cost estimates for the Johore Strait Scheme do not show that it would be more economical than the Johore River Project and there are good reasons for believing that actual costs would be considerably higher than the preliminary estimates. In addition, the scheme would require two to three more years of study before detailed design could begin and, follow-ing construction, seven or more years would be required to reduce the salinity of the impounded water to permissible levels - in other words, the Johore Strait Scheme would require up to 10 years more to complete than the Johore River project. Johore River Water Treatment Plant Basically, the method of treatment proposed is very much like methods used at Singapore's existing water treatmient plants. However, the proposed plant would incorporate some more conventional features, in terms of mnodern treatment practices, in order to improve the economics and quality of operation. These would include continuous sludge removal equipment for the clarification tanks and the use of more modern filter cleaning and control procedures. Final determination of the treatment processes to be used would be based on the evaluation of tenders based on performance-type specification requirin6 certain performance and quality criteria. Therefore, the attached tabulations of basic design data, upon which the cost estimates and this appraisal are based, is necessarily preliminary. December 1964  ANMNE 7 Page 2 The works proposed would be designed so as to facilitate the sub- sequent extension to a capacity of 60 iiGO. It is anticipated that this extension will be necessary in about 1972-1975. To this end the river intake will be constructed with a capacity of 60 lviGD. Some buildings at the treatment works including the pumping station buildings also will be of sufficient size to house equipment for a 60 MGD plant. However, only 30 kiGD will be installed initially. The treated water pipeline will only be laid as far as Tebrau estate which would permit 30 MiGD to be delivered to Singapore from the new works. As part of the second stage project, this transmission main would be extended to