water. At the time of the agreements it was expected that Singapore would become part of Malaysia, as it did for a brief period beginning in 1963. When Singapore separated from Malaysia in 1965, then Malaysian Prime Minister Tunku Abdul Rahman said that "If Singapore’s foreign policy is prejudicial to Malaysia’s interests, we could always bring pressure to bear on them by threatening to turn off the water in Johor". Decades later, Malaysia clarified that the statement should be seen in context that at the time, Malaysia and Indonesia were engaged in a confrontation and that the remark referred to the possibility of Singapore siding with Indonesia. This was another motive for Singapore to further develop its local water resources, according to Lee Kuan Yew. Therefore, in parallel to the gradual expansion of water imports from Johor the Public Utilities Board, created in 1963, embarked on the construction of more water schemes inside Singapore. They included the damming of river estuaries to allow for greater storage volumes. For example, the Kranji-Pandan Scheme, completed in 1975, included the damming of the estuary of the Kranji river and the construction of a reservoir at Pandan. In the same year, the Upper Peirce Reservoir was completed. As part of the Western Catchment Scheme, completed in 1981, another four rivers were dammed. In 1983, a dam was built across the estuary of the Seletar River to form the Lower Seletar Reservoir. But these amounts were still not sufficient, and seawater desalination was too expensive at the time to be considered. Singapore was thus interested in building a dam on the Johor River in Malaysia and an associated new water treatment plant. After six years of difficult negotiations, the Prime Ministers of Singapore and Malaysia signed a Memorandum of Understanding (MOU) in 1988 paving the way for an agreement in 1990 with Johor that allowed the construction of a dam (Linggiu Dam) in the state that will be operated by Singapore. Ever since, Singapore's Public Utilities Board has operated a water treatment plant in Kota Tinggi, Johor, known as the Johor River Water Works. Water negotiations (1998–2002) In 1998, Singapore began new negotiations with Malaysia to extend its water agreements beyond 2011 and 2061 respectively. In return, Malaysia initially asked to increase the raw water price to 60 sen per , corresponding to 4 US cents per cubic meter. This price was still much lower