ATC210805: Report of the Portfolio Committee on Human Settlements, Water and Sanitation on Oversight Visit to the Kingdom of Lesotho, Dated 27 June 2021

Human Settlements, Water and Sanitation

REPORT OF THE PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS, WATER AND SANITATION ON OVERSIGHT VISIT TO THE KINGDOM OF LESOTHO, DATED 27 June 2021

 

The Portfolio Committee on Human Settlements, Water and Sanitation, having conducted an oversight visit to Lesotho from 4 – 8May 2021, reports as follows:

1.         Background

 

The South African Constitution of 1996 and relevant parliamentary rules empowers the Portfolio Committee on Human Settlements, Water and Sanitation (Committee)to conduct oversight over any work of an executive organ of state that falls within its portfolio. The oversight is mainly through briefings by the organs of state such as Departments and their entities and visits to projects (physical inspection of projects). It is within this background that the Committee embarked on an oversight visit to Lesotho Highlands Water Project (LHWP) in Lesotho. The oversight trip was preceded by considering the Legacy Report of the Portfolio Committee on Water and Sanitation 2014-2019. This report identified LHWP as a priority project that the 6th Parliament assessesas no oversight visit was carried out at this project during the 5th parliamentary term.The briefings by the Department of Water and Sanitation, Trans Caledon Tunnel Authority (TCTA) and the Lesotho Highlands Water Commission (LHWC) on LHWP also necessitated the oversight visit.

 

The LHWP is a bi-national water transfer and hydroelectricity generation project between the Kingdom of Lesotho and the Republic of South Africa. It is a product of a Treaty between these two countries signed in 1986. In brief, the Treaty catered for project design, construction, operation, maintenance and water transfer for Phase 1. The Treaty was amended in 2011 to cater for the LHWP Phase 2. The LHWP is an African success story based on peaceful cooperation and mutually beneficial socio-economic development. The project provides hydroelectricity and water to the Kingdom of Lesotho and South African, respectively.

 

The Treaty charges the LHDA, LHWC and the TCTA with implementing the LHWP.  The LHWC acts on behalf of and advises both governments. It is also the channel for all inputs from the two countries about the project. It is worth noting that the Committee met the LHWC secretariat, Mr Ilembu Mwakalumbwa (Secretary - Tanzanian) and Mrs Joy Norman (Deputy Secretary - Motswana), that according to the Treaty should be from an independent State. The LHDA is responsible for implementing the project in Lesotho while the TCTA implements the project in South Africa. The Board of Directors of the LHDA reports to and is accountable to the LHWC.

LHWP comprises   Phase 1 (A&B) and Phase 2.  Phase 1A includes the 185m-high double curvature concrete arch Katse Dam in the central Maluti Mountains and the Muela hydropower station.  It is worth noting that Former President Nelson Mandela and His Majesty King Letsie III inaugurated Phase 1A on  22 January 1998. Phase 1B consists of the 145m concrete-faced rock-fill Mohale Dam on the Senqunyane River (not part of the site visit). The dam has a storage capacity of 958 million m³ and a spillway discharge of 2,600m³/s. It also includes a 31 km interconnecting transfer tunnel between the Katse and Mohale reservoirs, a 19m-high Matsoku Weir and a 6.4 km transfer tunnel.  Phase 1 (A&B) was completed in 2004. Former President Thabo Mbeki, together with His Majesty King Letsie III, attended the official celebration of the completion of Phase 1 in Lesotho. LHWP Phase 2 features a water delivery system to augment Phase 1 transfer of water to South Africa and a hydropower generation system. His Majesty King Letsie III and Former President Jacob Zuma officially launched this phase on 27 March 2014.

 

In the end, LHWP will have five dams and about 200km of tunnels and water transfer works constructed between the two countries. The project will transfer about 2,000 million m³ of water from Lesotho to South Africa every year.

2.         Objectives of the Oversight Visit

           

The purpose of the oversight visit was to evaluate the LHWP throughphysical assessment of Katse dam, Muela hydropower plant, Polihali dam (under construction) and associated advanced infrastructure (e.g. housing (proposed village), power supply systems, telecommunication systems, roads, bridges, and wastewater and water treatment plants). Broadly, the objective of the oversight visit was to assess the entire LHWP with respect to the governance and operational matters; socioeconomic benefits; Quality of work done for Phase 1 and Progress on Phase 2 of the project through onsite inspections and briefings by the LHWC, TCTA and the Lesotho Highlands Development Authority (LHDA).The oversight visit also involved establishinga formal relationship with the Lesotho Parliamentary Committee that deals with water and sanitation to ensure joint oversight on LHWP.

3.         Briefings and Site Visits

 

The Committee received briefings from the South African High Commission, Lesotho Highlands Water Commission and the Lesotho Highlands Development Authority on various aspects of the LHWP. The Committee also held a meeting with the Lesotho Parliamentary Cluster Committee on Natural Resource, Tourism and Land, preceded abilateral meeting between the chairpersons. The Committee visited the following projects:

 

• Katse Dam;
• Polihali Dam & associated advance infrastructure (under construction); and,
• Muela Hydropower Station

 

The subsequent sections provide a synthesis of the briefings and oversight visit engagements.  

3.         Multiparty Delegation

 

The list provided below provides the names of key delegates that were part of the oversight visit in Lesotho.

Portfolio Committee on Human Settlements, Water and Sanitation

Hon. R. Semenya, (ANC) (Chairperson of the Committee - leader of the delegation)

Hon. N. Mvana, (ANC)

Hon. P. Tseki, (ANC)

Hon. L. Basson, (DA)

Hon. R. Mohlala, (EEF)

Hon. R. Mashego,(ANC)

Ms V. Makubalo, (Acting Committee Secretary)

Mr T. Manungufala, (Committee Researcher).

 

Lesotho Parliamentary Delegation

Hon. K. Mathaba (Chairperson of the Natural Resource, Tourism and Land Cluster committee)

Hon. L. Kompi

Hon. T. Kholumo

Hon. T. Lerafa

Hon. T. Manyooko

Hon. M. Moremoholo

Ms. J Mamolete  (Support staff)

Ms B Makutloano (Support staff)

Mr T Matele (Support staff)

 

South African Higher Commission to Lesotho

Mr M. Reynhardt (Deputy High Commissioner)

Mr N. Ramasenya (Counsellor)

Mr R. Stroebel (First Secretary - Political)

 

Lesotho Highlands Water Commission

Mr L. Tromp (Chief Engineer – South African delegation)

Mr P. Swart (Financial Controller - South African delegation)

Mr M. Tabane (Lesotho delegation)

Mr D. Mosotho (Lesotho - Chief Delegate)

Mr I. Mwakalumbwa (Secretary - Tanzanian)

Mrs J. Norman (Deputy Secretary - Motswana)

 

Lesotho Highlands Development Authority

Mr Tente Tente (Chief Executive Officer)

 

Department of Water and Sanitation

Mr B Sithole (Director – Africa Bilateral Relations)

 

Trans-Caledon Tunnel Authority

Mr N Baloyi (Board Member – Chairperson of the Finance Committee)

4.         Overview of the Briefings and Site Visits

 

The Committee received three high-level briefings from the South African High Commission, Lesotho Highlands Water Commission and the Lesotho Highlands Development Authority before embarking on site visits.

 

4.1        Briefing by the South African High Commission (Deputy Commissioner, Mr Mark Reynhardt)

 

The purpose of the brief was to welcome the Committee in Lesotho and to orientate them on the South African mission in Lesotho. The briefing provided an overview of the Lesotho socio-economic and political environment with specific reference to political reforms, macro-economic performance and outlook, investments, and the economic relations between South Africa and Lesotho, and lastly provided statistics on trade and tourism between these two nations. The Committee appreciated the fact that the relationship between these two countries is based on peaceful cooperation and mutually beneficial socio-economic development.

 

4.2        Briefing by the Lesotho Highlands Water Commission (Chief Engineer Mr Leon Tromp)

 

Legislative Framework of the LHWP

The LHWP is a product of a Treaty between the Republic of South Africa and the Kingdom of Lesotho signed in 1986 (24 October 1986) and revised in 2011 (11 August 2011).  The presentation expressly referred to Article 6 (general duties regarding the project). This article, in summary, stipulates that South Africa is responsible for the parts of the project located in South Africa and its security, and Lesotho shall do the same. In this regard, South Africa shall establish TCTA while Lesotho shall establish LHDA to carry out these responsibilities.

 

The presentation further draws the Committee's attention to the amended Treaty 2011, popularly known as Phase 2 Agreement, Articles 10 and 11, which deals with Procurement of goods and services, and Recruitment of personnel, respectively, by the LHDA.  In summary, Article 10 stipulates that all procurement processes shall foster competitiveness, transparency, cost-effectiveness and quality; preference shall be given to suppliers of good and services, including consultants and contractors, in Lesotho, South Africa, Southern African Development Community (SADC) member states and then internationally, in that order. In addition, consultants and contractors registered in Lesotho and South Africa shall share the value of all infrastructure works on an equal monetary basis, taking into account their shareholding and operational experience, amongst other things.  Regarding recruitment of personnel, preference shall be given to nationals of Lesotho, South Africa and SADC member states, in that order, provided that the required skills and experience levels are met. Overall, the LHWP complies with the applicable laws of Lesotho, such as the Land Act 2010 and the South African laws such as the BBBEE regulations.  The LHWC provide a platform for decision making by Lesotho and South Africa on all aspects of the project.

 

Cost of Water Transfer Features

The South African government pays for the water to GoL through TCTA. The TCTA collects the tariff from the Department of Water and Sanitation, which it collects through the normal water pricing strategy in South Africa. In summary, the DWS charges raw water tariffs to large raw water consumers such as Water Boards, ESKOM and SASOL, among others, which it pays over to TCTA to finance the LHWP water transfer features.

 

Project Governance Model of the LHWP Phase 2

Lesotho and South African governments have designated the LHWC to oversee the implementation of LHWP by the TCTA and LHDA through, among others, approvals of operations and expenditures; monitoring project performance and risks, reporting on project activities, targets and impacts. In this regard, the TCTA is responsible for general project finance mobilisation, developing a project funding strategy and subsequent approval by LHWC and providing operational support to South African delegation in the LHWP. The LHDA is responsible for the construction of the Polihali Dam (2.2 billion m3); 38 km tunnel from Polihali to Katse dam; advance infrastructure (access & feeder roads, bridges, power and communication lines); implementation of environmental mitigation and socio-economic measures such as the compensation and relocation of communities.

 

Accountability framework

The Chief Executive Officers of both TCTA and LHDA account to their respective boards (TCTA & LHDA). These boards account to the LHWC. The LHWC accounts to both the DWS and Lesotho Ministry of Water. These departments account to their respective parliaments concerning LHWP.

 

Features of the LHWP Phase 2

Phase 2 will include the construction of Polihali Dam with concrete faced rock-fill embankment dam wall that is 163.5m in height with a total supply of 2075 meters above sea level. It is estimated that the construction will take 56 months (approximately 5 years), and filling of the dam will take 700 days (approximately 2 years). In addition, a Polihali-Katse tunnel with 18.8 m3/s capacity will be drilled, and it will increase Muela Dam’s full supply level by 2.5 m.   It will also include the construction of a hydropower plant with a 300-megawatt (MW) pump storage scheme. It is worth noting that this component is currently under investigation.  If deemed feasible after investigations, the station will be built at Bokong/Kobong valley and Katse Dam.  As part of Phase 2, A 50 km power line from Matsoku to Polihali will be installed. It will also carry a new fibre-optic line to ensure faster telecommunications.  New roads and bridges will also be constructed between Matsoku and Polihali to access villages around the dams.  Phase 2 will also include residential areas with all amenities such as hospitals and schools. A Lodge, contractor quarters, a school, and a hospital will be built at Mporosane and Polihali commercial areas. 

 

Environmental Mitigation Measures

As far as environmental management is concerned, the project rehabilitates all the degraded areas, implements an erosion prevention programme, and rescues indigenous fauna and flora. To maintain the aquatic ecosystem integrity, the project also maintains instream flow requirements by maintaining downstream water flow releases.

 

Displacement, Resettlement and Compensation

The Polihali dam currently affects 17 villages and 534 households, which translates into 2547 people. These villages will have to be resettled. Approximately 1125 hectares worth of crop fields and grazing land will be lost. This loss will affect 72 villages, 3 312 villages and 16 560 people. These people will be compensated accordingly. Compensation is per individual or communal depending on the ownership of assets. It is paid in aform of a lump sum or annual payments over 50 years.

 

Funding, Budget Allocations and Taxes

The Phase 2 long term committed budget for up to 2026/27 financial year is R32.562 billion, with R3.46 billion spent as of February 2021.  The funding requirement for 2021/22 is R4.18 billion from South Africa and R200.58 million from GoL. However, the GoL has only committed a total budget of R40 million, which amounts to less by R160 million. The GoL representative at the LHWC indicated that the negotiations with the Ministries of Water and Finance are underway to secure the remaining R160 million from the GoL.

 

Article 14 of the Phase 2 Agreement provides for the LHWP taxes. There is currently a disagreement on the interpretation of this Article. The status of this issue is that the GoL is studying the record of negotiations that resulted in this Article 14 while waiting for further records from the LHWC secretariat. It is worth noting that any deviation from the provisions of this Article will increase costs to the South African government. 

 

In as far as funding for 2021/22 is concerned, the Minister of Finance Tito Mboweni has approved the required guarantees for the African Development Bank (AfDB) and the New Development Bank (NDB). The TCTA is negotiating loans with various commercial banks in South Africa to secure additional funding for the main contracts on Phase 2.  The Namibian government has not issued the no-objection letter that is required in the funding application with many development banks. Nevertheless, this issue is being handled at the highest level by the South African and Namibian governments. All funding for Phase 2 must be in place by December 2021 to ensure compliance with the implementation schedule.

 

Overall Challenges and Risks

The general public and communities expectations remain a big challenge for the project as communities expect instant improvement to their living conditions while the political principals expect the project to meet all the needs of communities. Compensation remains one of the key challenges as communities feel the compensation model is unfair while others expect compensation when they have lost nothing to the project.

 

Delays in issuing work permits by the GoL to South African skilled workers are affecting project progress.  Alluvial diamond mining new and old licenses interfere with the project, as some of these activities are within the project areas.

 

As far as the risks are concerned, the Lesotho taxes on South African expatriate are not in line with the South African Labour Relations Act. This has the potential of increasing the cost of project implementation. This is currently ranked as high in terms of probability. The granting of work permits to South Africans is also posing a high risk to the project as it may affect the fair sharing of work and may delay construction that could lead to legal action by service providers. Unforeseen geotechnical conditions also pose a high risk to the project as it can delay construction such as tunnel excavation. The No-Objection letter from Namibia has a medium to high risk, as funding will not be granted until this letter is provided.  The GoL initial refusal to grant quarry and blasting permits to phase 2 contractors and COVID19 present a very high risk to the project. Construction may be delayed, which would inevitably increase project costs. COVID19 can slow down the progress and increase costs due to border restrictions, limited working hours, reduced staff, shortage of material and fuel, and provision of additional accommodation and personal protective clothing (PPE).

 

4.3        Briefing by the Lesotho Highlands Development Authority (Chief Executive Officer Mr Tente Tente)

 

The LHWP was one of the largest engineering projects at its inception in 1986. This project won the South African Institution of Civil Engineering (SAICE) Award on the Most Outstanding Engineering Achievement of the Century in 2006.  It is a bi-national inter-basin water transfer and hydropower generation project. It follows a phased approach of implementation that will last for 30 years.

 

This project was conceptualised as far back as the 1930s to earn revenue and reduce energy imports of the Kingdom of Lesotho and meet the South African industrial and households water needs. In summary, the benefits to Lesotho from this project are: Royalty revenue; High-quality infrastructure; Tourism opportunities associated with nature reserves and fisheries; Job opportunities; Skills transfer to Basotho, both blue and white-collar jobs and work for local contractors and consultants.  South Africa benefit from high-quality water; improved security of water supply for Gauteng with significantly reduced water treatment costs; Secure water supply for households, industries, agriculture and mining while local contractors and consultants benefit from professional planning, and actual construction works.

 

Description of Phase 2

The LHWC briefing has already addressed this. Nevertheless, in brief, Phase will include construction of Polihali Village, Polihali Lodge, and upgrade of Katse Lodge, Polihali Operations Centre, and Ancillary Public Facilities (Schools, Prison, and a Hospital). The other aspect worth mentioning is the Senqu Bridge, which will be 875 meters long on a 1.6 km road.

 

Phase 2 Progress

The progress regarding contracts awarded for consultancy services and construction works for the water transfer. The hydropower stood at 52 contracts with 35 contracts awarded for consultancy service concerning engineering, (14) environmental, social and health and safety, (15) project management and professional support, (7) for water transfer component while (13) were awarded for geotechnical drilling, access road construction and rehabilitation, diversion tunnel, transmission/power lines, temporary campsite and village services.  The construction of diversion tunnels and civil works stood at 80%, while civil works at Polihali permanent village stood at 90% and roads were at 40%. The main work is estimated to start in January 2022.

 

Advance Infrastructure – Monetary Share (unaudited)

R1.76 billion was expended as of March 2021, and 44% of this amount went to Lesotho, while 56% earned by South African companies.

 

Main Works – Monetary Share (unaudited)

A total of R945 million was expended as of March 2021, and 37% of this amount went to Lesotho, while 63% earned by South African companies.

 

Phase 2 Master Programme

The project's water transfer and hydropower components are scheduled for commissioning by 2027, a year later than the initial plan.

 

South African Funding

South Africa has met its funding obligation. The agreement has been finalised with lenders, particularly diplomatic immunities for New Development Bank and comments on the tender documents. It is also worth mentioning that the funding strategy is in place.

 

General Challenges (some already addressed by LHWC)

The degraded wetlands affect the water quality and quantity, whichnegatively affects the sustainability of the project. This is also affecting the river flows, which are critical to the viability of the LHWP. Climate change is compounding the effect of degraded wetlands as rainfall has become highly variable.

 

Observations, discussions and resolutions

The Members raised several issues following the briefing by LHDA, namely, the Lesotho Work Permit conditions; Stakeholder consultation (e.g. Survivors of the Lesotho Dams); Maintenance and Operation of dams; Royalties; Public Access to dams; advertisement of tenders; Impacts of Climate Change; Successful Bidders; and Compensation of displaced communities.

 

The work permit in Lesotho is given on the condition that the skill that is being sought is not available in Lesotho. The LHDA consult stakeholders extensively during all stages of the project, including the Survivors of Lesotho Dams. However, this NGO sometimes complains that their issues are not sufficiently addressed. Nevertheless, LHDA continues to engage with these communities and the NGO.

 

As far as compensation is concerned, demographic analysis is done to understand the best possible form of compensation for the beneficiaries. Beneficiaries are compensated in several ways. Some get houses and a lump sum that is paid annually over a period of 50 years. The payment of compensation takes into cognisance the future livelihoods of the beneficiaries.  Although the Agreement stipulates that beneficiaries should be paid up front, this is not always possible due to lack of funds. In this case, the LHDA negotiates with the landowners to allow the project to proceed and make payments when funds become available. Apart from deferred payment, sometimes payment of compensation is delayed due to family disputes or the death of the landowner. In these situations, the LHDA withholds the payment until the family selects the rightful beneficiary. The LHDA's legal obligations to the people and communities affected by the Project work are based on the Lesotho Constitution, the 1986 LHWP Treaty, the LHDA Order of 1986 and the LHWP Compensation Regulations, 1990: Legal Notice No. 50 of 1990.

 

The royalties are paid directly to the GoL, which then decides on the use of royalties. The payment of royalties will run up to 2044, and thereafter the payment will be on the actual volume of water consumed. For example, R1.1 billion was paid in 2020/21.

 

The land zoning system of Lesotho provides for public access to all landmarks or places of interests, including dams. Katse dam attracts several domestic and international tourists per year. To this end, there have not been complaints about access to dams for tourism purposes.

 

Climate change is affecting the rainfall patterns, and it is reducing the amount of water in the rivers. Katse dam used to overflow every year, but it has not overflowed for yearsnow.

 

Operation and maintenance are provided for in the plan, but the lack of funds is delaying maintenance and operation at Muela dam, which has a siltation problem.

 

Tenders are advertised on all leading print and digital platforms such as Sunday Times, Sowetan, City Press, Mail &Guardian etc. Awareness-raising events are held across major cities (Cape Town, Johannesburg, and Durban) before the advertisement of tenders.

 

The LHWP Phase 2 tenders for the current work has been awarded to two joint ventures (JV), namely, The SCLC Polihali Diversion Tunnel JV, which combines international, South African and Lesotho expertise. This JV is made up of Salini Impregilo S.p.A (South African branch), Cooperativa Muratori Cementistri CMC di Ravenna (South African branch), LSP Construction (Pty) Ltd, (Lesotho) and CMI Infrastructure Ltd (South Africa); and the Metsi a Senqu-Khubelu Consultants Joint Venture (MSKC), which also includes several South African and Lesotho-based firms. The MSKC JV is comprised of Zutari (formerly Aurecon (SA)), Knight Piesold (SA), Hatch Goba (SA), SMEC (SA) and FM Associates (Lesotho). The MSKC JV has designed the diversion tunnels and will also supervise the construction work. The tender evaluation considers the youth and women representation in the leadership of a company, enterprise development, ownership of the company, skills development and procurement of goods and services.

 

4.4        Joint Meeting between the Portfolio Committee on Human Settlements, Water & Sanitation, and the Lesotho Parliamentary Committee on Natural Resources, Tourism and Land

 

The meeting between the two chairpersons preceded this meeting. They reflected on the relationship between South Africa and Lesotho dates back to the days of the struggle against apartheid rule.  They appreciated that the fact that the relationship has advanced into a mutually beneficial partnership.  They further acknowledged the benefits accruing to both countries from the LHWP as evidence for this relationship.  Notwithstanding these benefits, the Lesotho Parliamentary Committee highlighted some challenges with respect to the Treaty that their counterpart should note for consideration. The challenges pertains to the fact that the Treaty was enter into during Apartheid rule in South Africa. They, therefore, feel that further engagements on the Treaty could improve its benefits to both countries.

 

The Committee acknowledged the mutually beneficial nature of the Treaty at its current form. They further appreciated the appraisal from the Lesotho Parliamentary Committee on the LHWP and the Treaty. A commitment was made that future engagements will be arranged to strengthen the relationship by learning and capacitating each other and dealing with issues of mutual interest such as the LHWP. 

 

4.5        Site Visit to Katse Dam

 

The tour of the Katse dam started at the Katse operations centre then proceeded to the dam wall for a closer inspection. Mr R Molapo led the tour. The Committee received a briefing on Katse dam operations, which reemphasised the earlier presentations. Katse Dam was the highest dam in Africa after its completion in 1998, but it is now the second-highest after the completion of the Great Renaissance dam in Ethiopia. The dam has a storage capacity of 1,950 million m³ and a spillway discharge of 6,252m³/s. It also consists of a 45 km transfer tunnel and a 37 km delivery tunnel.It is a double curvature dam 710 meters long and 185 meters high with 68 meters at the base and 9 meters wide at the top of the dam wall. It has been built to withstand seismic activity with a strength of a 7.2 on a rector scale.  The low-level water discharge at 590 m3/s is to cater for the environmental flow requirements or the reserve downstream. 

 

The tour leader indicated that Katse dam currently satisfies 60% of the Gauteng water demand.  It also generates 500 Gigawatt of electricity, which the Lesotho Electricity Company sells for 12 cents per kilowatt.  The project currently contributes 4% to the Lesotho GDP. 

 

The ploughing/ cultivation on the hills is generating sediments that are silting up the dam. The mining activities are also contributing to contamination of the water and siltation. There are not enough funds for the maintenance of the infrastructure.

 

Katse Dam - Aquaculture/Trout Fish Farming

The trout fish farming operations followed rigorous due diligence and an environmental impact assessment process. Trout fish farming is currently practised at both Katse and Mohale dams. It is currently producing tons of trout per annum sold locally and exported to Asian markets. The Royale Highlands Trout products of trout originating from Katse Fish Farms are available at top retailers in Southern Africa such as Woolworths, SPAR and certain Pick n Pay stores, including Maseru Pick n Pay. In addition, Katse Fish Farms also supplies Ocean Basket, Lesotho Sun, Maseru Sun, Maliba Mountain Lodge, and Bensons with fresh trout.

 

The fish farm is owned by Sanlei (Pty) Ltd (Sanlei a Japanese expression, meaning where the mountains meet the sky). It isa private entity owned by an American private equity firm One Thousand and One Voices. The communities currently benefits through employment opportunities. It has the licences to operate in the dams of the Lesotho Highlands Water Scheme. Mr Molapo indicated that the future expansion of these fish farms would be properly regulated to include community empowerment initiatives. Members reiterated that fish farming should comply with the environmental laws,empower communities, and contribute to food security.  They further raised a concern with respect to the impact of tourists’ boats and vessels on water quality and general integrity of the dams.

 

4.6        Site Visit to Polihali Dam

 

Polihali dam is located in the Mokhotlong district (Mokhotlong means the place of the bald ibis in the Sesotho language). It includes the highest terrain in the Maloti Mountains and the source of the Senqu River, Lesotho’s primary catchment.The site visit started with the briefing on Health and Safety by the Health and Safety representative, Mr M Leboela, at the campsite.  The health and safety report card showed no covid19 related fatalities, low accident rate and insignificant pollution incidents.

 

The Committee proceeded to tour the diversion tunnels that are scheduled for completion in November 2021. The Divisional Manager, Mr M Mokone, provided a progress report during the site inspection of the inlet and outlet of the two tunnels. It is worth noting that Covid19 delayed work for 9 months, and the flooding that took place in January 2021 compounded the delay, as the drilling had to be halted to reduce flooding in the tunnels. The water quality tests revealed that the floods did not contaminate the water; as a result, the water was pumped back into the river.

 

The discussions at this project site followed several questions from members of the Committee. It is worth noting that the District Administrator (This is equivalent to a Premier in South Africa), Mr M Dinake for the Mokhotlong district, joined the delegation at this site and provided a brief.  The District Administrator reported that there had been several protests from the communities for employment opportunities. The protesters allege that South Africans are taking majority of job opportunities and are paid more. The delayed payment of compensation for resettlement by LHDA is a cause for concern for communities.  Apart from these challenges, the Administrator acknowledged that the project is critical, should be protected, and commended LHDA for their efforts in working with government in order to find lasting solutions to these challenges. Furthermore, the government is working with the construction companies to rehabilitate wetlands to maintain water availability in the highlands.

 

The Committee requested Mr Mokone to elaborate on the impact of the project on communities;the number of affected people; therelationship with stakeholders such as the Survivors of the Lesotho Dams NGO; water provision to the communities; impact of flooding in the tunnels; number of South African engineers employed at the project; number of employees from the surrounding communities; companies appointed at project; and state of compensation at this project.

 

Mr Mokone indicated that two companies are currently working at this site, the SCLC – Joint Venture and MSKC – Joint Venture. These companies are made up of Basotho and South African engineers that worked on Phase 1 of the LHWP. A trainee engineer (young professional)named Mr R Sadiki was introduced to the Committee. He is currently contracted to MSKC joint venture. It should be noted that the project is not attractive to the majority of South African engineers due to its rural setting.There are 360 workers at this site; 300 are Lesotho nationals, 20 are South Africans, while 40 are expatriates.

 

The project has acquired approximately 5000 hectares of land from local communities. The Polihali Dam will flood this land in the valleys and tributary catchments of the Senqu and Khubelu Rivers. This will lead to resettlement ( approximately 300 households and 17 villages) with potentially significant impacts on the livelihoods and socio-economic status of the local population as cultivation land, trees, grazing land, and other natural resources will be inundated and access to resources and facilities impeded. The acquired land will be permanently used for infrastructure developments such as access roads, power lines, telecommunication systems, office and residential accommodation, and some land will be occupied temporarily during the construction period.

 

Phase 2 of LHWP and its associated advanced infrastructure positive impacts outweigh the negative impacts on communities in Mokhotlong and neighbouring districts such Butha-Buthe, Thaba Tseka and Leribe. The compensation of affected people is mandated by the Agreement between South Africa and Lesotho governing Phase 2. The LHDA is mandated to ensure that the risks associated with resettlement are addressed and that affected people's livelihoods are restored.Affected communities, local authorities and other stakeholders wereconsulted during thedevelopment of the Phase II Compensation Policy,which defines the range of losses and specifies compensation and relocation entitlements was approved by the Project authorities in 2016. Compensation and resettlement programmes are being implemented to ensure that affected households are fairly compensated and that physically displaced households are properly relocated and re-established.

 

A Phase II social development master plan will also be prepared to promote social, environmental and economic development in the project area that is both sustainable and in line with national development strategies and goals. In this regard, the LHDA has secured the services of experienced resettlement consultants to assist with the preparation and implementation of these programmes (Lima Rural Development-Thaha Joint Venture (a joint venture between the Lima Rural Development Foundation and Thaha Projects), and Makhetha Development Consultants working with the LHDA in-house team). These consultants continue to work closely with affected communities to identify and confirm all affected households; register affected land and assets; determine compensation entitlements, and establish relocation and livelihood restoration preferences. This is an ongoing participatory planning process that the consultants will assist the LHDA with the implementation once completed. The LHDA will maintain a community liaison function to ensure the effective involvement of affected communities in the resettlement programme. To this end, significant progress in planning and asset registration and verification had been done by the consultants appointed to the project.

 

LHDA has strategically installed water tanks to provide drinking water in the interim to ensure the provision of water to the villages. There is a plan to reticulate the villages around the dam and put up sanitation facilities. A consultant will be appointed to plan a water and sanitation programme.  Electricity will be provided through the advanced infrastructure together with the telecommunication services. Plantech is currently working with Lesotho Electricity Company and LHDA on the electrification programme for Phase 2.

 

4.7        Site Visit to Muela Hydropower Station

 

Mr Molapo led the tour of the station. It is located at Muela in the northern Botha-Bothe District. Lesotho generates her electricity for this station.The Station has an underground powerhouse cavern that accommodates three transformers and three turbine generators rated at 24 MW.  It receives water from Katse Reservoir via a 45km-long concrete-lined transfer tunnel measuring 4.35 meters in diameter. Water is discharged into Muela dam after spinning the turbines. Water is then conveyed by delivery tunnels via Muela Intake Structure to the tunnel outlet at Ash River in South Africa. From the Ash, River water flows into the Wilge River and then to the Vaal River.

This station is entirely funded by the Lesotho government, operated by LHDA. It currently produces 500-gigawatt hours per year. The LHWP phase 2 will add 300-gigawatt hours that will enable the station to run for 24hrs. 

5.  Recommendations

 

 

The Committee having considered the oversight report makes the following recommendations:

 

5.1. Treaty between the Republic of South Africa and the Kingdom of Lesotho on the Lesotho Highlands Water Project

 

5.1.1. The Committee resolve that a virtual meeting should be arranged with the Lesotho Parliamentary Committee to consider the Treaty and identify areas that need to be amended in order to align the Treaty with the current socioeconomic needs of the two countries.

 

5.1.2. TheDepartment and TCTA should provide a detailed briefing on the Treaty, which should reflect deeply on each of clauses or provisions that deal with operation and maintenance, sharing of benefits (contracts, employment opportunities, etc.), payment of royalties, and taxes among others. This would enable the Committee to make recommendations with regard to areas for improvement on the Treaty if there are any.

 

5.2.   Impact of tourist boats and vessels

The Committee recommended that the impact of tourists’ boats and vessels on the water quality and general dam infrastructure should be investigated and managed to prevent water pollution and damage to the dam infrastructure.

5.3. Namibian No-objection Letter

The Committee noted that the delay in the issuing of a no-objection letter by the Namibian government to support the South African funding application for LHWP and that this issue is being handled at the highest level by the South African and Namibian governments. In this regard, the Committee recommended that The Department should provide progress report when it briefs the Committee on this project.

5.4. Permits

The Committee noted that there is a delay in issuing work permits to South African nationals and the permits for blasting and quarrying by the Lesotho government.  The Committee resolved that the Department should indicate to the Committee how it is addressing these delays.

5.5. Local Community Development and Empowerment

The Committee recommended that the project should benefit and empower the local communities. The fishing farming business should foster local community ownership and deeper involvement.  The development associated with the project such as the bed and breakfast lodges should be owned by Basotho in general and the displaced communities in particular.  The Procurement of goods and services policy should be maintained as it currently prioritises South Africa, Lesotho, SADC and then International service providers in this order.

5.6. The Reserve or Environmental Water Flows

The Committee noted the strategic water release to cater for the reserve requirements for the downstream users and recommended that this should be maintained and adhered to when the Polihali dam is complete.

5.7. Talent retention and succession plan

The Committee noted that the LHWC, Chief Engineer, Mr Leon Tromp will retire during the course of 2021. In this regard, the Committee recommends that his successor should be one of his current staff members that have served under him and should preferably be an EE candidate.

5.8. Climate Change

The Committee noted the impacts of climate change on the LHWP and the adaptation activities that the LHDA is implementing in order to address the impact of climate change. In this regard, the Department should provide a brief on the implications of climate change on the LHWP with respect to various climate change scenarios. 

5.9. Funding from the Government of Lesotho

The Committee noted the shortfall of R160 million in funding from the Government of Lesotho for the 2021/22 financial year and that the LHDA is in consultation with the GoL with respect to the settlement of this shortfall. In this regard, the Department should provide a briefing on the implication of inability of the GoL to fund its portion of the project.

5.10. Lack of representation from the Department and TCTA during the oversight visit

The Committee noted the absence of the accounting officers or properly delegated representative of the account officers for both the TCTA and the Department during the oversight visit. In this regard, the accounting officers for both the Department and the TCTA should prioritise attending all future parliamentary oversight visits when invited.

6.  Conclusion

 

The poor representation of the Department and TCTA during the oversight visit is a cause for concern. A number of issues could have been dealt with during the oversight visit if key officials had attended. COVID19 restrictions also affected the oversight with respect to time and number of people that could take part on the oversight visit. The Lesotho members of parliament could not join the oversight visit due to covid19 restrictions. Notwithstanding all these issues, the Committee commendsthe South African High Commission, LHWC, LHDA and the Department of Water and Sanitation for the arrangement, management and coordination of the entire oversight visit. The Committee acknowledges and appreciates the participation and the commitment for partnership with the Lesotho Parliamentary Committee on Natural Resources, Tourism and Land. The quality of work that has been done during Phase 1 and the progress made thus far on Phase 2 of the LHWP is commendable. The project appears to be mutually beneficial to both countries. To this end, the objectives of the oversight visit were satisfactorily met.

 

Report to be considered.