LESOTHO EXPORTS WATER TO SOUTH AFRICA: A Lesson to Nepal
AB Thapa
The Lesotho Highlands Water Project is one of the largest and the most intricate construction projects currently underway in the world. This project has been conceived to export water to South Africa and also to generate electricity. The first phase of this ambitious long-term master plan was scheduled for completion in 1996. It is planned to deliver 18 cum./s of water to South Africa as well as generate 72 MW of hydroelectricity for Lesotho during the first phase. The cost of the first phase project was US $ 2. 518 billion based on 1991 estimate.. The entire cost of the project ( excluding the hydropower addition that constitutes a small component of the total project cost) was to be recovered from the export of water to South Africa. The net downstream benefit to accrue to Lesotho from the export of water to South Africa after deducting the project cost was US $ 25 million per annum.
Lesotho Completely Encircled by South Africa
Lesotho, formerly Basutoland, bordered on all sides by South Africa. Lesotho is one of only three nations in the world to be completely encircled by a single country (the others are San Marino and Vatican City). Its dependence on South Africa for access to the outside extends to economic reliance as well, and has deeply affected the development of the country since independence in 1966. The kingdom of Lesotho is mainly mountainous and has a total area of 30,355 sq km. The capital and largest city is Maseru. Lesotho was able to reach an agreement to recover a fair share of downstream water export benefit despite its complete dependence on South Africa.
Lesson to Nepal
Nepal must hold negotiations to reach an agreement with India to get a fair share of such downstream benefit prior to taking the final decision to implement our storage projects. Else our country would be deprived of such downstream benefit for ever. We all would be failing to protect our legitimate national interest whereas even the most backward landlocked country in Africa like the Lesotho is able to recover 56 percent of such net downstream benefit to accrue to the South African Republic from the use of the regulated flow of its rivers. Lesotho lagging far behind our country in human development index and completely thrown at the mercy of the powerful South Africa has recently demonstrated that it too has a good sense to take full advantage of the opportunity to exploit its water resources to accrue multifold benefits.
Lesotho Highlands Project
For South Africa, the water was required to supplement the existing supply in the Vaal Basin catchments area, the principal source of water for the Pretoria- Witwatersrand- Vereening (PWV) area, the country’s commercial and industrial heartland which includes the Greater Johannesburg and Pretoria conurbations. The Lesotho Highlands Project, one of the world’s largest construction projects currently underway, is geographically divided into two sections. More than three-quarters of the tunneling and all storage reservoirs are located in Lesotho, the tiny landlocked Kingdom within South Africa. This constitutes about 95% of all construction work required. Construction began in 1986 on the $300 million Katse dam in southeastern Lesotho, the main component of phase 1A of the Highlands Water Project. Some 1,500 Basotho workers were to be employed on the dam project.
The portion in South Africa comprises the final 22km of the delivery tunnel network from the Lesotho border to the scheme’s outfall near the Axle River ( also known as the Ash River). From the outfall, the transferred water, a maximum flow of 18cum/sec for Phase 1A and equivalent to 567 million cum per year, will eventually enter into the Vaal Dam about 70 km south of Johannesburg.
By the year 2000, the PWV will accommodate 42% of South Africa’s population and will generate 56% of all industrial and 79% of all mining output, It is expected that the population of the Vaal River supply area downstream of the Vaal Dam will increase at a rate of 2.4% per year from 5.75 million in 1980 to almost 12 million by the year 2010. This represents an increase of 106%. The corresponding domestic and industrial water demand is expected to increase from 979 million cum to 3803 million cum per year, an average annual growth rate of 4.6%. Phase IA of the Highland’s Project will secure a reliable supply of water to the PWV region to the year 2004 when the current 7 million population is expected to increase to 10.5 million.
Preparing the Groundwork
Realization of the scheme is made possible under a Treaty signed by the Republic of South Africa and Lesotho in 1986. Under the terms of the Treaty, South Africa agrees to pay a royalty for all water delivered from Lesotho for the duration of the Treaty.
Royalties for the first 50 years are based on historical feasibility studies carried out by South Africa to ensure a reliable water supply for the PVW area. One of the earliest schemes investigated was based solely in South Africa and proposed diverting water from the Orange River and using a combination of gravity and pumping facilities to convey it over abut 500 km of canals and tunnels to the Vaal Dam.
With the Vaal Dam at a higher elevation than the intake, such a scheme would have been expensive both in terms of electricity for consumption for continued pumping requirements and for the ongoing costs of operation and maintenance. Investigation of an alternative scheme proved significantly more cost effective. Under that scheme water would be diverted from the upper reaches of the Orange in Lesotho where it rises as the Senqu River and be gravity fed to the Vaal Dam. It is on this scheme that the current Lesotho Highlands Project is based.
Sharing Net Downstream Benefit
South Africa agreed to pay for the capital cost of structures required for water transfer and to share with Lesotho the total cost savings between this scheme and the original scheme based solely in South Africa. As such, South Africa pays to Lesotho as a lump sum each year a predetermined amount which constitutes 56% of the cost benefit savings between the two schemes. These include the difference between the two schemes. These include the difference in the estimated capital costs of building each scheme; the cost of electricity saved by eliminating the pumping requirement on the original South African scheme; and the projected maintenance and operating cost savings between the two schemes. This amounts to an annual income for the Lesotho of approximately $25 million per year(in 1991 prices) for the first 50 years of the Treaty, subject to various adjustments for inflation and other financial considerations. At that time, the difference in the capital cost of building each scheme will have been realized in full and royalties will be renegotiated for the remaining period of the Treaty. Undoubtedly, the downstream benefit to accrue to Lesotho after 50 years would be far exceeding the present amount because by that time the project cost would have been fully recovered.
