Singapore suffered one of its worst droughts in 1963, when water stocks dropped to dangerously low levels. Water rationing was introduced in April 1963 and was only lifted ten months later in February 1964, with the return of heavy rainfall. What started off as zone rationing for six hours a day, four times a week, was soon extended to islandwide rationing for twelve hours a day, three times a week. It was a painful episode. Singaporeans had to be conscious of when the rationing periods were, and wake up early or stay up late to store the water they needed. Otherwise, they would have to collect their water from public stand pipes during rationing hours. The usual routines were disrupted and the cost of food went up.

During this period, with the dissolution of the City Council, the Public Utilities Board (PUB) was established in May 1963 as a statutory board to coordinate the supply of water, electricity, and piped gas. With regard to water, PUB was charged with improving and expanding the available water assets to keep pace with population expansion and industrial development. To the fledgling PUB, the drought of 1963 left deep and indelible impressions among its officers which remain to this day.