Question NW428 to the Minister of Water and Sanitation
07 March 2024 - NW428
Moore, Mr S J to ask the Minister of Water and Sanitation
(1)By what total amount has the cost of the Lesotho Highlands Water Project escalated since its inception; (2) whether the second phase of the specified project is on track to be completed by 2028; if not, why not; if so, what are the relevant details?
Reply:
1. Since the date of inception of the Lesotho Highlands Water Project Phase II the costs have escalated to the current estimated total project cost of R42.1billion. It is important to note that these are overall costs which incorporate costs that are not directly related to the LHWP infrastructure costs and are shared costs to be borne by South Africa and the Lesotho Government.
The cost escalations are owing to several challenges including:
a) Longer time to conclude negotiations with Lesotho and obtain governmental approvals for the Phase II Agreement, 3 years to Dec 2022.
b) Procurement related delays due to policy interventions, delayed decision making and in the conclusion of funding arrangements, 2 years to Dec 2024.
c) Project implementation related delays due to Covid which delayed the project by 2 years.
d) Slow issuance of various permits by Lesotho, contractor performance and one year shift in the impoundment date due to a lost rainy season, 4 years to Nov 2028.
All major contracts have now been awarded and construction of the dam and tunnel is in progress.
e) The time value of money (escalation) impact of the 9 years delay from 2019 to 2028 on the R42.1 billion is estimated at R16.64 Bn.
2. Water delivery is expected to start in November 2028.
---00O00---