A Brief History of Africa’s Largest Water Project

A Brief History of Africa’s Largest Water Project

Updated January 2005


The Watershed

The Senqu (Orange) River originates in Lesotho, and forms the boundary between South Africa and Namibia before it enters the Atlantic Ocean. The five–dam Lesotho Highlands Water Project (LHWP) would divert about 40% of the water (called "white gold" by project authorities) in the Senqu river basin to South Africa’s Vaal river system in Gauteng Province. Water sales from the project are the country’s single largest source of foreign exchange, and account for 75% of the country’s budget. During recent droughts, Lesotho has seen its own crops shrivel as its water was shipped to South Africa. Multiple tributaries in the watershed would be dammed if all dams in the project were completed. Two of the dams,the 180–meter–high Katse ("Phase 1A") and the 145–meter–high Mohale ("Phase 1B"), are complete.

The Project

This huge interbasin water–transfer scheme comprises five proposed dams, 200 kilometers of tunnels blasted through the Maluti Mountains, and a 72–megawatt hydropower plant that will supply power to Lesotho. It is one of the world’s largest infrastructure projects under construction today. The project’s primary purpose is to transfer water to Gauteng Province, the industrial heartland of South Africa.

The scheme is being managed by the Lesotho Highlands Development Authority (LHDA), which is responsible for resettlement and compensation issues, environmental protection and overall construction management. In South Africa, the project is overseen by the Department of Water Affairs and Forestry (DWAF) through the Trans Caledon Tunnel authority. The Joint Permanent Technical Commission (JPTC) was established to represent both countries.

In late 1997, the end–user for the project’s water, Rand Water, revealed that it had done a preliminary study which showed Mohale Dam could be delayed 8–20 years by implementing water–conservation measures. NGOs and the World Bank attempted to obtain the study, but neither Rand Water nor the Department of Water Affairs was forthcoming with the information. Despite strong evidence that Mohale dam could be delayed, the South Africa and Lesotho governments proceeded with the project one year ahead of schedule. My report to the US-China Economic and Security Review Committee: China at the Tipping Point.

Local opposition from civic groups heated up around this time, too, as the connection between rising water rates and the LHWP was made known. The percentage of bulk–water costs that Rand Water pays for the LHWP tariff is rising dramatically, from 8% in 1991 to more than 30% in 1999; in 2004, water rates were increase by more than 6% because of the high cost of LHWP water, according to Business Report. The Lesotho Highlands Water Project agreement requires South Africa to continue importing water from Lesotho even if local dams were full. Rising costs could make it more difficult to get water supply to disenfranchised townships, which are still suffering from horrendous apartheid–era inequities in water supply.

Costs & Financing: The entire project is expected to cost $8 billion, with Phase 1A estimated to cost US$2.5 billion and Phase 1B estimated at $1.5 billion. An important lender is the World Bank, which granted $8 million in concessionary loans to help finance project design and set up the financial package; and $110 million for Phase 1A. At the time of this writing the World Bank had not been approached about funding phase 2. Other donors include the Development Bank of South Africa, the African Development Bank, the European Development Fund, various export credit agencies and European commercial banks. Most of the money for the water transfer elements is coming from South Africa.

Social Issues

The once remote mountain communities of the Lesotho Highlands have been changed dramatically by the project. Some 20,000 people moved into the area to work on the project, and many squatters’ camps were established near the project as well. AIDS was introduced by the work force (today, Lesotho has one of the highest AIDS rates in Africa), and prostitution and alcoholism greatly increased. Besides the changes brought by the influx of outsiders, the new reservoir is itself a physical disruption to community life: individual families and even whole villages have been disrupted and whole livelihoods have evaporated, while communities that used to share social ties are now cut off from each other by the reservoir.

More than 20,000 people were affected by Katse Dam, losing either their homes, farm land or the use of communal grazing lands. Another 7,400 were affected by Mohale. For those who lost houses, replacement housing took years to complete. Many who lost homes to power–line construction in 1990–91, for example, still did not have replacement housing in October 1995, according to the World Bank. Efforts to restore livelihoods have been quite troubled. In 2003, an effort to use project revenues to bring development to Highlands communities was deemed unsatisfactory by the World Bank and closed. In late 2004, the project was granted a loan extension by the World Bank, which reports that while engineering works are complete, there are major concerns about the social and development work to improve the lives of affected people.

Arable Land: Thousands of hectares of grazing or arable land would be lost if the entire project were built. Since only about 9% of Lesotho’s land is considered arable, any loss will have nationwide ramifications. Some 3,000 hectares of grazing land and 925 hectares of arable land have been lost by Phase 1A. Phase 1B eliminated another 575 hectares of arable land – some of the best soils in the region – as well as 1,635 hectares of grazing land, according to the World Bank. Read a Pipe Dreams (PDF) on attempts to restore affected people’s livelihoods, by a former International Rivers staffer who lived in the affected area for three years.

Environmental Impacts

The LHWP began without an environmental impact assessment (EIA) for the overall project. There is still no such report for Phase 1A, although some 35 baseline studies of the area’s flora and fauna were done after construction began. A full EIA has been done for Phase 1B, and an Environmental Action Plan, but neither addresses outstanding problems from Phase 1A.

Downstream Damage: The effects of diverting most of the river’s flow below the dams are substantial. Basically, these impacts include reductions in wetlands habitat, less water available downstream for people and wildlife, reductions in fisheries, and cessation of flooding. The hydrological variability of these floods is critical to many species found in ecosystems downstream of the LHWP – a variability that will cease with the damming of the waters. The EIA for Phase 1B states that the "impacts of altered river regime on downstream ecosystems and resource users is uncertain and unpredictable," but notes that water quality below the dam will be altered – including lower sediments, oxygen levels and nutrients and a change of water temperature.

Endangered Species: The Maloti minnow, rock catfish and the bearded vulture are some of the known rare and endangered species that are losing habitat to the project. A threatened endemic plant, the Spiral Aloe, will be affected by the project, as will rare bird species that nest in the area. Since no studies were done before construction began on Katse Dam, it is unknown whether the Maloti minnow was found in streams and rivers in the area. LHDA reports that the minnow has been found in at least seven sites in the catchment area of Mohale Dam. The mitigation measures for the minnow include an untried captive breeding program, as part of an effort to restock the fish in appropriate habitat. However, there are plans to introduce trout for recreational fishing in the reservoir, which the EIA acknowledges would "eliminate through predation" remaining populations of the minnow in the watershed. In addition, the umbraculate frog – an important indicator species for water quality – will "disappear from the area," according to the EIA.

Water Use in South Africa

Water demand is increasing in South Africa. While many suffer from inadequate supply, the historically low cost of water has led to profligate use in the domestic, industrial and agricultural sectors where water supply is well established. At the same time, many cannot afford the cost of water, which has gone up significantly because of the LHWP, and the project has led civic groups to question the South African government’s water–planning priorities. In January 2004, South Africa’s water ministry reported that 40% of the nation’s water supply is "lost" through leaky pipes and non–metered uses.

Demand–side management and My report to the US-China Economic and Security Review Committee: China at the Tipping Point could reduce South Africa’s need for large new water projects. Such an approach identifies ways to use water more efficiently and reduce water lost to leaks rather than develop new sources. Although South Africa is an arid country, there are still sectors where water use could be cut significantly. For example, it is estimated that less than 50% of water diverted from rivers for agriculture actually reaches crop root systems. In the urban sector, Rand Water estimates that more than half of water consumed in the Johannesburg–Pretoria metropolitan area is wasted through inefficient uses and leaks. Although the Lesotho water is used primarily for industrial and domestic use, a demand–side management program that included the agricultural sector could delay the need for any new water supplies for several decades.

Project Timeline:

1954 Project first conceived.

1966 Lesotho becomes independent from Britain.

1983 Guerrilla violence occurs in Lesotho over selling Lesotho’s water to South Africa.

1986 Treaty signed in October by South Africa’s apartheid government and Lesotho’s military regime which established the Lesotho Highlands Water Project.

1989 Construction begins on Katse Dam.

1990 LHDA produces its first Environmental Action Plan for the project, addressing for the first time some of the social and environmental implications of the project.

1995 Sluice gates closed on Katse Dam. Earthquakes caused by the filling of the reservoir begin within weeks.

1996 Five workers on project killed by police, who were called in by project contractor to break up what they termed an "illegal strike." Earthquakes continue. One damaged village, Mapeleng, is finally given new houses to replace those damaged by quakes, a year after damage first recorded.

1997 Rand Water, the end–user for LHWP water, reveals that Phase 1B could be postponed by as much as 20 years with water conservation measures. NGOs and US government officials press for review of demand–side management options and the economics of project postponement, but Department of Water Affairs urges World Bank to fund Phase 1B without delay.

1998 Water deliveries from Katse Dam began, as well as power production from Muela power plant (18 months later than planned).

1999 Widespread discovered on LHWP. Numerous multinational companies on the project found to have bribed the project’s CEO.

2000 For the first time, dam–affected people hold a public demonstration to call attention to their plight. Research into the impacts of the dam project on downstream ecosystems reveals that, if the project delivers all the water it has promised, Lesotho’s rivers will become akin to "wastewater drains."

2002 First of bribe–giving firms found guilty in a Lesotho court.

2004 World Bank finally debars ACRES, one of the firms found guilty of bribery on LHWP.

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