(AFP) Singapore today rejected allegations by Malaysia that the city-state has been underpaying for the water it gets from its neighbour.

A spokesman for the foreign ministry here also denied that Singapore has been delaying negotiations on water pricing, which Prime Minister Dr Mahathir Mohamad has said caused Malaysia to lose money daily.

"Singapore has been waiting for Malaysia to clarify certain key points and clearly set out its position in order that there will be a framework for officials to resume negotiations to settle details," the spokesman said.

On Jan 28, said that Singapore had been delaying negotiations and that "the longer talks are prolonged, the more money Malaysia will lose."

The outspoken premier also said that Malaysia had long been underpaid for water supplied to Singapore, and that Kuala Lumpur now wanted a reasonable price but that Singapore has refused.

"This is not true," the spokesman said in a statement which did not mention Mahathir. Singapore said that in February last year, it agreed to pay Malaysia 60 sen per thousand gallons, with the price to be adjusted for inflation every five years, in any new agreement.

While it was not obliged to do so, Singapore said it offered to pay 45 sen per thousand gallons under the current agreements.

Singapore, which is lacking in natural resources, obtains half of its daily water needs from Malaysia's neighbouring Johor state at three sen per 1,000 gallons.

Its two water agreements with Malaysia expire in 2011 and 2061.

Created fiction

Water supply has been one of a number of issues which have created friction between the two neighbours since Singapore became independent from the Malaysian Federation in 1965.

The Singapore spokesman today said that the prices should be seen in the context of an overall package under negotiation.

"The package includes, among other things, payments that Malaysia will receive for railway land in Singapore. The total amount of money that Malaysia will receive when other items in the package are factored in will be over RM1.5 billion," the spokesman said.

Singapore also took exception to Mahathir's comparison with what Hong Kong is paying for when it buys water from mainland China.

The Special Administrative Region buys water from China at RM8 per thousand gallons, Mahathir said, using the comparison to show that Malaysia is being underpaid.

Singapore said the comparison was "misleading." "The price of RM8 per 1,000 gallons paid by Hong Kong to mainland China for raw water takes into account China carrying the infrastructural, operational and maintenance costs," the spokesman said.

"Malaysia does not bear any such costs in supplying water to Singapore. All these years, Singapore absorbed all costs of building the infrastructure in Johor for water supply such as dams, pipelines, plants and equipment. "We also bear the operational costs," the spokesman said.