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Open Letter to Prime Minister Thabane and President Cyril Ramaphosa

From CONCERNED BASOTHO CITIZEN

  1. LESOTHO HIGHLANDS WATER PROJECT 1986 AND 2011 PHASE II AGREEMENT

1.1 Lesotho highlands Water Treaty was initiated under the BNP led Government and pursued under protracted negotiations culminating in a Treaty concluded by a Military led Lesotho government  in 1986 nine months after the latter overthrew the BNP led Government.

1.2 The treaty was first proposed by South Africa solely for the supply of water. Studies undertaken by South Africa had predicted chronic water shortages in future and identified Lesotho as a preferable alternative source because of the lesser costs that were to be incurred in the water transfer due to gravitational advantages which Lesotho offered.

1.3 Lesotho never entertained the idea to sell water until the South Africa government proposed it. But in the South African Proposal, Lesotho saw the opportunity to generate own electricity as a grandiose idea that would solve its energy reliance on South Africa, something that would leverage the country towards political independence which was forever  threated by the total dependence of Lesotho on South Africa. Furthermore the current cost of electricity confirms the speculation (the unsupported) that the electricity generated in the Lesotho would be cheaper than the electricity produced by ESKOM South Africa.

1.4 The current Prime minister of Lesotho has relentlessly and unequivocally questioned the property of the current water project in flagrant disregard of the Treaty provisions on electricity. The prime minister’s reaction was undoubtedly buoyed by the provisions of Article 8 (2) of Phase II Agreement which made the generation of electricity a condition. This was in contrast to the provision of Article 4 of the Treaty which provided that

“(1) The purpose of the Project shall be to enhance the use of the water of the Senqu/ Orange river by storing, regulating, diverting and controlling the flow of the Senqu/ Orange river and its affluents in order to effect the delivery of specified quantities of water to the Designated Outlet Point in the Republic of South Africa and by utilizing such delivery system to generate hydro- electric power in the kingdom of Lesotho.

1.5 the possibility and imperative to generate own electricity was the raison d’etre  the government of Lesotho was amenable to negotiate the South Africa proposal. That the generation of electricity was paramount and probably the only need can be from the fact that energy needs for Lesotho and the prospects of reduced energy dependence on South Africa were arguably the only reasons why the United Nations would have sanctioned Lesotho to trade with South Africa during currency of the trade embargo that was imposed by the United Nations on the South African regime at the time

1.6 That the generation of electricity was paramount can also be noted from the steadfast reaction by the Government of Lesotho when the generation of electricity was rejected as not viable by the South Africa Government and the World Bank. The then prime minister of Lesotho, Dr Leabua Jonathan in consultation with then exiled leader of the ANC, the late Oliver Tambo authored a correspondence addressed to the President of the World Bank in which the government stated in unequivocal terms that it would withdraw from the proposed negotiations and abandon the project if the generation of electricity was excluded from the project, irrespective and notwithstanding how compelling the motivations were.   

1.7 The World Bank relented on the strength of the correspondence, and agreed to fnance the project into what became the lesotho highlands treaty.

2. PHASE II AGREEMENT- POLIHALI DAM

Introduction:

2.0 Lack of guarantee for the generation of electricity as borne by the provisions of article 8 (2) of phase II Agreement; changes in the government model- Article 6 (2) (a) which provides for the project management unit (PMU) 1 and the Procurement functions / operations of the PMU particularly the Implementation of Article 10 (c) 2 relating to equal sharing of opportunities between citizens of the two countries are the major concerns with Phase II Agreement.

2.1 Lesotho Highlands Water treaty provided for the implementation of the project in three phases namely Phase 1 vls. Katse Dam, Mohale Dam and Matsoku weir. Phase II, Mashai Dam. Phase III Tsoelike Dam.

2.2 Polihali was not included in treaty but was considered during the feasibility studies.  It was excluded for the following reasons:

2.2.1 It could not meet the final capacity of 70 cubic meters of water per second required by South Africa;

2.2.2 It did not provide for the generation of electricity and

2.2.3 It was not the least cost solution compared to the alternative project in South Africa which is the Orange Vaal transfer scheme (OVTS).

2.3 it is important to understand that the Revenue Sharing Formula / compensation to Lesotho was also calculated on the basis of the financial savings which South Africa stood to benefit from Highlands water project in comparison to the costs which it would incur under the OVTS project.

1 Provides that “The Lesotho Highlands Development authority shall establish, as part of its institutional arrangement, a Project Management Unit to oversee and manage the implementation of Phase II and shall delegate to it the powers necessary for this purpose”.

Article 6 (2) (b) “The Project Management Unit shall be staffed by professionals with experience in the construction and implementation of large water resource and hydropower projects, who shall be competitively procured through an open tendering process.

Article 6 (2) (c) The project management shall report to a Divisional Manager (Phase III Implementation) in the Lesotho Highlands …. And shall consist of various components, including engineering, financial, social, Environmental and Communication”

Article 6 (2) (d) “The project management unit established in accordance with paragraph (a) shall be dissolved once Phase II has reached substantial completion”.

2 provides that @consultations and contractors registered in Lesotho and South Africa shall share the value of all infrastructure works on an equal monetary basis, taking into account, amongst other things, their shareholding and operational experience.

2.3.1 it was projected that the Lesotho Highlands project would save South Africa, a total of 44% of what it would have incurred in the OVTS project. On that basis, the contracting parties agreed that Lesotho would benefit from royalties to the extent of 56% of the total to South Africa.

2.3.2 Of striking importance is the fact that the compensation formula was calculated and based on the projected output of the revenue due to Lesotho under the treaty. The factual situation is that South Africa stands to benefit gratis from the Polihali Dam.

2.4 The inclusion of Polihali within the Highlands Water treaty accordingly came as a surprise for several reasons:

2.4.1 Its inclusion has not been made within the protocol framework anticipated by the Highlands water treaty.

2.4.2 Despite being the raison d’etre for Lesotho’s participation in the project, the hydroelectricity project does not form part of Phase II.

2.4.4 The construction of the dam under the current circumstances renders the projected construction of the Mashai dam under phase 2 of the Treaty a doubtful and potentially wasteful task owing to the interruption of the water flow which the Polihali Dam would cause.

2.4.5 Further,

(a) The mashai Dam was conceived as an ideal alternative not to guarantee the litre per second required by South Africa, but to also guarantee generation of electricity to Lesotho, something which has already mentioned, was the only reason Lesotho agreed to negotiate the treaty.

(b) the construction of Polihali not only risks collapsing the remaining dams under treaty projects and supply of the litres per second to South Africa but also dampening the aspirations of Lesotho to generate its own electricity and in the process condemning it to the perpetual  dependence on South Africa for electricity.

(c) The threats posed by collapsing the construction of remaining framework of the current highlands project cannot be undermined because (i). it is inevitable that South Africa’s water needs would not be met; (ii) another dam will have to be constructed; (iii) Mashai dam can no longer be the dam in question because of the interruption in the water flow that Polihali will have caused; (iv)  the Mashai and the other two dams conceived through an elaborate feasibility study undertaken by a consortium of engineers of international repute from countries  outside the contracting states parties; (v) the studies were therefore objective and arguably carrying more weight than a feasibility study only undertaken by our contracting.

2.5.7 That the lack of appropriate oversight has been a deliberate construct as opposed to mere oversight can be seen in the overwhelming majority of South Africa representation on PMU, the uneven allocation of opportunities to South Africa and most disturbingly with a racial bias in favour of the white owned South Africa entities.

2.5.8 The PMU has been able to create and perpetuate these inequities subtly through the procurement regulation which it has set and structured to favour white owned firms as against the black owned South Africa firms and indigenous black Basotho firms. Complaints levelled at the LHDA will never achieve their objective unless the structural defects in the PMU and in its very unrepresentative policy formulation are addressed. 

2.5.9 The complex legal issues involved cannot be left the determination of the courts. A political solution is all that is required. The legal systems have their own limits. Courts and the legal processes are tailored to recognise claims which have been anticipated by the system.

2.5.10 The CLC litigation is a living example. The true concern of the latter is the onslaught and economic aggression which the process often than favour not fragments issues from their true social and economic nature continues to be meted on previously disadvantaged communities, Black South Africans and Basotho through the LHDA structures and policies which have masked the bias in favour of previous beneficiaries and conglomerates.

2.5.11 this state of affairs is largely brought about by the racial composition of the key decision making bodies as already discussed. As already mentioned, these have titled the bias in favour of white South African firms and conglomerates effectively enriching their dominance and monopoly against the spirit and objectives of the treaty and change in political attitude towards equal opportunity and aggressive effort to advance the course of the previously disadvantaged.

2.5.12 the true battles should not therefore be aimed at the procurement policies and regulations which the institutions of the LHDA have promulgated. The target should the framework behind the policies and unseating the architects behind the policy.

2.5.13 not only is the legal system incapable of handling such radical reforms as are required herein, but it also has the structures which inhibit the propagation of reforms. The legal costs incurred in prosecuting litigation as well as the costs to be awarded are impediments to proper vindication of rights especially to previously disadvantaged persons, an impediment which can effectively be and helpless. It would be injustice for the two governments to fold arms and watch their citizens attempt a mammoth task of challenging conglomerates who have enormous resources.

2.6 It is there recommend that:

2.6.1 The president of south Africa and the prime minister of Lesotho convene an urgent meeting to consider the challenge and plight of the citizens of the respective countries brought by structural proplems with the view to resuscitate the visions of the treating through either, all or some of the following:

2.6.1 The Polihali project be abandoned in faviur of the Mashai project as envisaged in Phase II of the Treaty Alternatively

2.6.2 Immediate establishment of a commission of inquiry composed of retired judges from South Africa and Lesotho to investigate the activities of the PMU particularly relating to the granting of equal opportunities to citizens of concerned countries and the composition of the PMU with the view to make appropriate recommendations.

2.6.3 The electricity component must be included as an integral component of the Polihali project if the latter proceeds (Kobong hydropower).

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