Katse Dam. Picture: SUNDAY TIMES

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From 2023 the new Polihali Dam in Lesotho is due to begin filling up. The plan is that, within a year, it will start delivering water to SA at a rate of 15m ³/ second under the second phase of construction of the Lesotho Highlands Water Project (LHWP).

But government’s own projections in 2011, assuming first delivery of water from Polihali would be in 2020, showed Gauteng would face a rapidly widening deficit of water from 2015 onwards. Polihali would only temporarily address this, unless water from the dam was supplemented with treated acid mine drainage (AMD) water.

Professor Anthony Turton, of the Centre for Environmental Management at the University of the Free State, says putting together a delayed project, an unforeseen drought and uncertainty over AMD contracts makes Gauteng’s water situation even more critical. The province accounts for 60% of the national economy.

After last year’s severe drought, SA’s major metros have implemented strict water restrictions. The department of water & sanitation said last week that the Vaal River system, which has 14 dams and serves mainly Gauteng, Sasol and Eskom, was 54% full on average, against 75% last year. It includes the Katse Dam, built in the first phase of the LHWP, at 47%.

The LHWP is a joint SA-Lesotho project to divert water from the Senqu River in Lesotho to meet Gauteng’s needs. Under a treaty signed between the countries in 1986, it is intended to deliver 70m³/second of water to the Vaal River system in phases.

The first phase, completed in 2003, was designed to deliver 35m³/second from three dams, Katse, Mohale and Muela. It also has an intake tower, transfer and delivery tunnels, and hydropower station at Muela that generates about 72MW for Lesotho.

The second phase began in 2005 with a feasibility study. It will require construction of the 2.3bnm³ Polihali Dam and a 38km transfer tunnel between the Polihali and Katse dams, as well as access roads and accommodation. There will also be a hydropower station between Katse and a new dam to be built at Kobong, which will generate 1,200MW of power for Lesotho’s own needs. Excess power will be sold to SA.

The Lesotho Times reported in April that Youth League Forum board member Rabele Makakole had sent questions to Lesotho’s government about the affordability of the hydropower project and the likelihood of getting Eskom to sign an off-take agreement when it has other power-generation plans.

Lesotho’s chief delegate to the Lesotho Highlands Water Commission (LHWC) says a consultant will be appointed shortly to undertake market, geotechnical and other studies to bring the Kobong project to bankable feasibility stage.

The first phase of the project was highly controversial, as subsequent investigations showed bribes were paid to the LHWC to secure contracts. The second phase, barely out of the starting blocks, has already attracted controversy.

SA minister of water affairs & sanitation Nomvula Mokonyane recently had to answer questions from the public protector about changes in the leadership of the project, delays and allegations of impropriety in the awarding of contracts.

Turton says the projections of the inter-ministerial committee on AMD were that if desalination of AMD were implemented by 2015, it would plug the shortfall between Gauteng’s demand and supply until about 2022, when the Polihali Dam would make up the rest. But there has been no open tendering or public participation in plans for treating AMD. This raised questions about whether the minister was fulfilling her duty as a custodian of SA’s water resources or as a cadre encouraging rent-seeking.

The cost of the second phase is not the R9bn initially reported, but R23bn. SA’s chief delegate to the LHWC says the initial estimate was based on a 2007 feasibility study, mainly used for comparative purposes to identify the preferred effective augmentation option for the Vaal River system. The current estimate is based on a re-optimisation of the project configuration. It includes escalation and contingencies until construction is completed at the end of 2024.

He says the main factors contributing to the increased cost are more detailed and market-related cost estimates, provisions for contingencies and escalation, including currency fluctuations, and a later completion date than initially envisaged.

The funding agent for the SA government is the Trans-Caledon Tunnel Authority, which has experience of fundraising and treasury management. SA is responsible for financing the water transfer component and Lesotho the hydropower component.

The LHWC delegate says the main sources of funding "may include, but will not be limited to, end-user tariffs, commercial loans and capital markets bond issues and possibly contractor finance".

At this point, six contracts have been awarded and several more are being negotiated, the LHWC delegate says.

Seven more will be awarded shortly, including for the design and construction supervision of the Polihali tunnels, western access road, and power and telecommunications facilities.

About 3,000 jobs will be created during construction. Under the second-phase agreement, preference will be given to employing people from Lesotho, SA and Southern African Development Community states, in that order. The LHWC has also briefed small and medium enterprises about opportunities to bid for sub-consultancy services, labour advice, legal services, gardening and cleaning, office space, accommodation and transport.