Can Johor's water supply keep pace with its rapidly expanding economy?

JOHOR is rapidly becoming one of Malaysia’s most important economic frontiers. The Johor-Singapore Special Economic Zone, accelerated industrialisation, and the extraordinary expansion of data centres are strengthening the state’s position as a regional investment hub.

Yet this transformation is creating a less visible strategic question: can Johor’s water system expand quickly enough to support its economic ambitions without compromising household supply, environmental resilience, and its longstanding water relationship with Singapore?

The evidence does not support the simplistic claim that Johor is “running out of water”. In June 2026, the Federal Government told Parliament, citing the National Water Services Commission (SPAN), that raw-water abstraction in Johor stood at approximately 2,052 million litres per day (MLD). Johor also retained a statewide reserve margin of about 14.4%.

However, a positive statewide reserve margin should not be mistaken for an absence of risk. Johor’s central challenge is increasingly one of timing, geography, and resilience: whether new sources, treatment plants, and distribution infrastructure can be completed before rapidly rising demand places existing systems under greater pressure.

A race between demand and infrastructure

Official projections presented to the Johor state legislative assembly indicate that treated-water demand could reach 2,700 MLD by 2030, rising to 3,000 MLD in 2035 and 3,300 MLD by 2040. In response, Johor is planning or developing new treatment capacity, including projects at Pakej Semangar, Layang 2 Phase 2, Semangar 3, Kayu Ara Pasong, and Sedili Besar.

Together, these projects are projected to add approximately 1,100 MLD of treated-water capacity and support demand through 2040. Crucially, however, this is future capacity rather than water already available within the present system.

This distinction matters. Johor’s water security question is therefore not simply whether sufficient projects have been announced, but whether they can be completed in step with the pace of economic expansion.

That concern has already reached Parliament. In June 2026, the Member of Parliament for Pulai highlighted projected growth in water requirements within the Johor Baru regulatory area and questioned whether new treatment plants would be completed in time. The Federal Government acknowledged that several projects were at different stages of implementation.

Infrastructure delays could consequently become as significant to Johor’s future water security as the physical availability of raw water itself.

Data centres are changing the water equation

The rise of data centres makes this issue especially important.

On May 5, 2026, the Johor state legislative assembly was informed that there were 65 data-centre projects by land plot, comprising 20 operational projects, eight in implementation, and 37 approved or at various further planning stages. The 20 operating projects recorded an actual electricity load of approximately 919.97 MW as of March 2026. The state subsequently reported that the approved capacity of 28 projects had reached 5,628 MW.

Electricity capacity should not be directly converted into water consumption: different data centres employ different cooling technologies and therefore have very different water requirements. It would likewise be inaccurate to attribute every water disruption in Johor to the sector.

The February 2026 difficulties in Simpang Renggam demonstrate this point. Prolonged hot and dry weather reduced Sungai Benut to a minimum level while the Machap Dam fell below its safe operating level, leaving the Simpang Renggam Water Treatment Plant operating at only around 34% of capacity. Emergency interventions included an additional four million litres per day from the Yong Peng treatment plant and a pontoon system designed to channel up to 20 MLD into the Sungai Benut system.

The incident was fundamentally a raw water and drought problem, not evidence that data centres had already consumed Johor’s available water.

Yet data-centre growth undeniably changes future demand planning. Johor’s response is therefore significant.

Parliament confirmed in June 2026 that a collaboration between Malaysia's national sewerage company, Indah Water Konsortium, and Johor Special Water was already supplying 12 MLD of high-quality reclaimed water for data-centre cooling. The Federal Government described it as the first such initiative in Malaysia.

This approach should become central to Johor’s industrial strategy. Drinking-quality water should not automatically be the default source for industrial cooling where sufficiently treated alternative water can perform the same task.

The broader principle is straightforward: new economic development should create new water capacity rather than merely absorb existing water security.

One river, two national interests

Johor’s challenge is unusually complex because one of its most important water sources is also part of Singapore’s national water-security system.

Under the 1962 Johore River Water Agreement, which remains in force until 2061, Singapore is entitled to draw up to 250 million gallons of raw water per day from Sungai Johor. In return, Johor is entitled to treated water of up to 2% of the quantity imported. Singapore’s PUB (Public Utilities Board) has also supplied additional potable water to Johor on request during periods of drought, pollution, or maintenance, beyond its contractual obligation.

This arrangement means that degradation of Sungai Johor cannot always be treated as a purely local environmental matter.

On Oct 31, 2025, the failure of a sediment pond associated with sand mining activities sent turbidity in parts of Sungai Johor to approximately 37,400 nephelometric turbidity units (NTU), compared with a normal level of around 400 NTU. Johor authorities warned that the incident placed the Linggiu, Semangar, and Sungai Johor water-treatment plants, as well as Singapore’s PUB facility, at risk.

The episode illustrates the changing character of Malaysia–Singapore water relations. For decades, public discussion has frequently concentrated on the price of raw and treated water. Increasingly, however, river yield, water quality, pollution, and climate resilience may be equally consequential.

This shift is already reflected diplomatically. At the Singapore-Malaysia Leaders’ Retreat on Dec 4, 2025, both governments reaffirmed their obligations under the 1962 agreement and supported continued technical work to increase the yield and resilience of Sungai Johor while safeguarding its water quality. A newly established technical working group is specifically addressing yield, water quality, and river resilience, while discussions over raw and treated water prices continue separately.

Water must become part of Johor’s economic strategy

Johor therefore does not face a simple story of water scarcity. It faces the more difficult task of ensuring that water governance keeps pace with economic transformation.

Building treatment plants and new raw water infrastructure will be essential, but physical construction alone is insufficient. Johor will also require stronger river-basin protection, pollution enforcement, greater industrial use of reclaimed water, careful sequencing of investment approvals, drought preparedness, and continual scrutiny of whether infrastructure completion dates correspond with projected demand.

This is particularly important as the Johor-Singapore Special Economic Zone and the digital economy draw increasingly intensive investment into the southern part of the state.

Johor’s success should therefore not be measured only by how many data centres, factories, or billions of ringgit in investment it attracts. A more durable measure will be whether the environmental infrastructure supporting that growth remains secure.

Water in Johor is no longer merely a public utility. It is simultaneously economic infrastructure, environmental security, and an element of Malaysia-Singapore relations.

The decisive question for the coming decade is thus not whether Johor has sufficient water today. It is whether Johor can build tomorrow’s water system before tomorrow’s economy fully arrives.

DR MOHD FIRDAUS ABDULLAH

Senior lecturer

Center for Research in History, Politics, and International Affairs

Faculty of Social Sciences and Humanities

Universiti Kebangsaan Malaysia

The writer's research expertise focuses on Malaysian history, particularly water development, water history, and the politics of water in Malaysia.