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EXPLAINER: HOW MUCH MONEY LESOTHO EARNS FROM SALE OF WATER TO SA

By Public Eye

MASERU, Sept 17 (Public Eye) Lesotho earns sixty-four lisente, on average, per thousand litres of raw water it sells to South Africa.

This has triggered a backlash from a water rights group that has described the deal facilitating water sales to South Africa as virtual pillaging of Lesotho’s water.

Observers add Basotho households pay at least 10 times more for the same amount of potable water than the raw water pumped to turn the turbines of Africa’s financial powerhouse, whose economy is 170 bigger than that of Lesotho.

Through the Lesotho Highlands Water Project (LHWP), Lesotho transfers water from the highlands to the industrial centre of South Africa, Gauteng via the Vall River System.

LHWP is a multibillion-dollar, multi-dam water project developed in partnership between the governments of Lesotho and South Africa, and signed into life in 1986.

The project is considered Africa’s largest water transfer scheme.

The water Lesotho supplies to South Africa has come to be known as “white gold”.

According to the Lesotho Highlands Development Authority’s (LHDA) comprehensive water sales report for the period from November 1996 to July 2019, the country made a revenue of M9 949 916 036 from selling 15,453.20 million cubic meters of water (about eight full Katse Dams) to South Africa.

This translates to M0.64 per cubic meter or 1,000 litres of water according to the report.

This is in sharp contrast to the glaring lack of access to clean water that still plagues families in Lesotho, especially those in rural areas.

Masilo Phakoe, LHDA’s public relation Manager, rubisshed the established view that Lesotho is selling water to South Africa.

Phakoe said: “That water is not sold. How can we block Senqu river water and then sell it when the total Orange-Senqu River basin extends over four countries, Botswana, Lesotho, Namibia, and South Africa?”

He indicated that fair river sharing meant Lesotho could not block the river water in Lesotho and then after tell downstream countries like South Africa that water would only be released to them if they paid.

“The river passes through South Africa either way and South Africa could have still decided to build the dam at Aliwal and Lesotho would not benefit anything but it was going to be costly to pump water from there,” he said.

He further explained that Lesotho was approached because it is cheaper to get water from Lesotho.

He said it was agreed that the two countries would share the cost savings – the money saved from changing the location of the dams from South Africa to Lesotho.

“That cost saving is called benefit and it comes to Lesotho in the form of royalties. Lesotho is not selling water but is getting a benefit of allowing South Africa draw water from here at a lesser cost.

“That cost saving is, in simpler terms, a difference between what South Africa could be spending to get water from elsewhere and what it is actually spending by getting water from Lesotho. Computing of the royalties is not a straight forward task,” Phakoe said.

The treaty states that: “Consequent upon the implementation of Sub-phase IA of the Project and in accordance with the provisions of this Article, South Africa undertakes to share with Lesotho, by way of royalty payments, on the basis of fifty-six per cent on the part of Lesotho and forty-four per cent on the part of South Africa, the net benefit…”

“The agreement was that Lesotho would get 56 percent of the cost savings while South Africa would get the remaining 44. So, we can safely say in that regard the agreement is in favour of Lesotho. In the 1986 Treaty that cost saving is called benefit and it comes to us in the form of royalties,” Phakoe said.

The water from the LHWP is used in six provinces of South Africa, according to the LHDA.

It cools the Eskom power stations in Mpumalanga, keeps Sasol and the Free State gold mines operational and supplies the vast industries and sprawling urban areas of Gauteng.

It also provides life to some of the southern towns of Limpopo and the platinum mines of North West, as well as the diamond mines and people of Kimberley and surrounding areas.

Under drought conditions, emergency water can, and has been transferred to the Caledon River and to the Eastern Cape and southern Free State through the BloemWater network.

According to the World Vision – an international humanitarian aid, development and advocacy organisation – 80 percent of the rural population in Lesotho still collects drinking water from unprotected sources.

And, that majority of them must travel more than 30 minutes to collect this unsafe water.

In the 2018/2019 financial year, Water and Sewage Company (WASCO), government-owned water utility that supplies bulk portable drinking water to urban areas, charged domestic Band A customers M5.53 per 1,000 litres.

Band A customer consume less than 5,000 litres per month.

Band B customers, those who consume between 5,000 and 10,000 litres per month, were charged M9.39 per 1,000 litres while Band C customers paid M16,52 for the same amount.

Band C customers consume between 10,000 and 15,000 litres per month.

Customers who consume above 15,000 litres (Band D), were charged M22.78 per 1,000 litres.

On April 16 this year, WASCO submitted to the Lesotho Electricity and Water Authority (LEWA), a tariff adjustment Application of 8.5 percent tariff increase for both volumetric and standing charges for domestic and non-domestic customers and re-introduction of standing charge for Band A of M10.00.

Amongst the various tariff increase drivers in the application, WASCO cited manpower, power, chemical usage, transport, depreciation and maintenance costs.

But at the meeting held on July 19, LEWA board then decided and approved a 2.93 percent increase in volumetric water tariffs for all water consumers.

The standing charge was increased by 4.7 percent for all consumer categories except for Band A.

LEWA said the standing charge for Band A domestic customer category (those consuming between 0-5,000 litres per month) will “remain at M0.00 as opposed to the proposed M10.00”.

Minister of Water Samonyane Ntsekele was at the Limkokwing University of Creative Technology (LUCT) graduations ceremony when Public Eye contacted him to get his comment.

The LHDA water sales report further revealed that Lesotho received some M936 million in royalties from exporting some 779 million cubic meters of water to South Africa in 2018.

In 2017, some 779 million cubic meters of water were transferred to South Africa and Lesotho received about M903 million in royalties. In 2016, a M837 million revenue was made from sale of 779 million cubic meters.

At inception, the highlands water project was designed to include five phases implemented over a period of 30 years and expected to transfer about 70 cubic meters (70,000 litres) per second of water to South Africa.

Phase I, already completed in 2003 and inaugurated in 2004, was split into Phases 1A and 1B – construction of Katse dam and Mohale dam respectively.

Phase 1A was completed in 1998.

It consisted mainly of the construction of the Katse Dam on the Malibamat’so River. A 45 Kilometre transfer tunnel was built from the Katse Dam to the Muela Reservoir.

The Muela Reservoir is considered to be the tail pond, which supplies hydro-electric power for Lesotho. Stemming from the Muela Reservoir is a 37 Kilometre delivery tunnel to the outfall at the As River in the Free State from where water flows to the Vaal Dam.

Phase 1B was completed in 2002. It consisted mainly of the construction of the Mohale Dam, a large rockfill dam, located on the Senqunyane River and a 32 kilometer transfer tunnel between the Mohale Dam and the Katse Dam.

It also consisted of the construction of the Matsoku Diversion Weir and a 5.7 kilometer tunnel from the Matsoku Diversion Weir to the Katse Dam.

The system is interconnected in such a way that water may be transferred in either direction for storage in Mohale dam or ultimate transfer to South Africa through the Katse reservoir.

Katse dam is the transfer reservoir for the whole LHWP.

All the water captured by different structures like Mohale dam flow from it to South Africa via Clarens in the Free State.

A new dam, Polihali in Mokhotlong, is planned to supplement Katse, in the second of five phases to develop Lesotho into a full-blown water resource for the whole southern African region.

But this expansion has been delayed for at least two years. Polihali was originally scheduled for completion in 2018 but has been repeatedly postponed.

Public Eye reported last month that Katse dam was only 18.21 percent full.

It has dropped to 15.93 this week while Mohale dam is at 32.48 percent.

The LHWP 1986 treaty also gives Lesotho an opportunity to build generate electricity at ‘Muela utilising the water released to South Africa.

‘Muela hydropower station generates only a portion of Lesotho electricity needs – 72 megawatts.

According to the electricity sales from LHDA to Lesotho Electricity Company (LEC) report, ‘Muela has to date, sold 9,299,524 MWh to LEC and raked in about M1.1 billion in revenue.

‘Muela also exported 226,452 MWh from which it derived about M22 million revenue.

Lenka Thamae, Survivors of Lesotho Dams (SOLD) national coordinator, told Public Eye yesterday that the 1986 LHWP treaty enabled South Africa to take over Lesotho’s water resources.

SOLD is an ecumenical non-profit making and non-governmental organisation committed to justice and advocacy for public inclusion and participation in decisions that affect communities affected by dams and large infrastructure developments.

“South Africa is taking Lesotho water while Lesotho gets almost nothing in return. South Africa is sucking Lesotho dry. The treaty must be reviewed,” Thamae said.

Article four of the treaty states that the purpose of the project is to store, regulate, divert and control the flow of Senqu and its affluents in order to effect delivery of specified quantities to South Africa and by utilizing such delivery system to generate hydro-power in Lesotho.

Thamae said this article must be amended “so that it can state specifically that the other purpose of the project is to alleviate poverty in Lesotho”. NW

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