"My sense is the foreign ministers will be able to make good progress but I do not expect a resolution of all problems," Goh Chock Tong said recently.
Negotiations on a water deal between the two countries have been going on for nearly nine months, with little progress achieved as both sides argued over the price and the quantity of water sold by Malaysia to its neighbor.
Last September, both countries seemed to have achieved a breakthrough on five key bilateral contentious issues, but little progress has actually been achieved in fleshing out the details of the deal.
During the meeting in Kuala Lumpur foreign ministers will discuss those bilateral issues, including a new proposal set forward by Malaysia and counterproposal from Singapore.
The other pending issues are the relocation of the Malaysian Customs, Immigration and Quarantine facilities in Singapore, the redevelopment of Malaysian railway land in Singapore, use of Malaysian airspace by Singapore's air force and release of Singapore Central Provident Fund contributions to West Malaysians. But the water deal remains the most difficult and key issue.
Currently, Singapore obtains half of its water needs from Malaysia under agreements running until 2061 and 2062. The Malaysian state of Johor provides 350 million gallons of water per day to Singapore at $0.007 per 1,000 gallons, while Singapore has to resell a minimum 17 million gallons per day of treated water to Johor at $0.13 per 1,000 gallons.
Malaysian Prime Minister Mahathir Mohamad described the current price as "ridiculous," pointing that Hong Kong pays mainland China $2.10 per 1,000 gallons.
The price differential has prompted calls from Malaysian politicians that Singapore is profiteering from the deal, while Singapore officials argue that the Malaysians are not taking into consideration the cost of treating the water for Singapore, which they estimate at $0.63.
Malaysia's foreign minister, Syed Hamid Albar, recently called on Singapore to keep an "open mind" and accept a competitive price. "Malaysia doesn't want to continue to be shackled or haunted by the water problem," he said.
Meanwhile, Goh has said he is hoping for "a formula, which can stand the test of time."