Water/dams deal irks Lesotho's new rulers

Mail and Guardian

http://mg.co.za/article/2012-12-07-00-water-deal-irks-lesothos-new-rulers


07 Dec 2012 00:00 - Caswell Tlali

WATER DEAL IRKS LESOTHO'S NEW RULERS

South Africa has been accused of putting undue pressure on a weak
government to extract an unfair deal. Caswell Tlali reports.

Controversy continues to stalk the bilateral Lesotho Highlands water
scheme because Lesotho's new coalition government wants to scrap
"prejudicial" sections of the country's agreement with South Africa
governing the construction of the proposed R9-billion Polihali dam.

The 1999 agreement, unearthed by the Lesotho Times last week, clearly
reflects South Africa's desire for greater control over the crucial
infrastructural project, which supplies water to industrial and
domestic consumers in Gauteng and beyond.

It was signed when the Lesotho government was almost paralysed and
South African troops were still stationed in the kingdom after the
invasion sponsored by the Southern African Development Community
(SADC) a year earlier.

Sources in the Lesotho Cabinet told the Mail & Guardian last week that
the government was uncomfortable with the agreement its predecessor
had signed with South Africa on the second phase of the giant water
project.

But Timothy Thahane, Lesotho's water affairs minister, would only say
that his government was studying the agreement and that it had not
been ratified.

However, Lesotho Prime Minister Thomas Thabane told a media conference
after meeting President Jacob Zuma in October that he had asked him to
allow some aspects of the project to be reviewed.

Phase two will see the construction of Polihali Dam in Lesotho's
Mokhotlong district, which will augment the water in Lesotho's Katse
Dam, from where it will be channelled to the Vaal River.

Expenditure

A reading of the contentious agreement shows why it has irked
Thabane's six-month-old government. It appears to trump a bilateral
treaty signed in 1986, plainly stating that, where the terms of the
agreement and the treaty differ, "the meaning provided for in this
agreement" prevails.

Lesotho is known to be unhappy with the agreement's provision that
South Africa will provide services and other materials for the
Polihali Dam's construction without paying tax.

The 1986 treaty makes South Africa liable for taxes on all expenditure
related to the project. The net effect of the 1999 agreement is that
South Africa receives Lesotho's water tax-free.

South Africa pays between 35-million maloti (the maloti is on a par
with the rand) and M45-million a month in royalties for the water from
the Katse and Mohale dams.

In 1999, Lesotho also signed a controversial protocol in which it
agreed to refund South Africa all levies it paid during the
construction of the Katse and Mohale dams during phase one of the
project.

Lesotho repaid R341-million of taxes it levied between 1986 and 2000.
The principal amount was M186-million, but with 15% annual interest,
the country ended up paying M156-million more. The amount included
corporate, income and fringe-benefit taxes.

A further difference is that, under the treaty, the water project
belongs to Lesotho and South Africa is no more than a customer. Under
the 1999 agreement, the project is jointly owned by the two countries.

Resisted overtures

Initially, South Africa's interests were catered for by the joint
permanent technical commission, which later changed its name to the
Lesotho Highlands Water Commission, an oversight body with equal
representation from both countries.

The treaty also gave Lesotho the power to appoint the management of
the Lesotho Highlands Development Authority, the project's executive
arm. The 1999 agreement shifted that duty from the Lesotho government
to the commission.

Under the 1986 treaty, South Africa only controlled the tunnel from
the Lesotho border.

South Africa's apartheid rulers first began pressing Lesotho under the
government of Leabua Jonathan to enter into a joint water scheme, but
their overtures were resisted.

After the military coup in 1986, probably sponsored by South Africa's
apartheid government, the leader of the new military junta, Major
General Metsing Lekhanya, hurriedly signed the treaty amid speculation
that the South Africans were putting pressure on him.

Embarrassment

The 1999 agreement followed a post-election crisis in Lesotho when
opposition parties rejected the poll results and the armed forces
mutinied. The army commander and other senior officers fled to South
Africa. Accepting the argument that Lesotho had become ungovernable,
SADC voted to send in troops under South Africa's leadership.

The first warplane that entered Lesotho on September 22 1998 headed
straight for the Katse Dam. Sixteen Lesotho soldiers guarding the
facility were killed and replaced by South Africans.

South African and Botswana forces remained in Lesotho for three years,
during which the 1999 agreement was concluded.

A senior government official, who asked not to be named, told the M&G
that Lesotho was "still recovering from the embarrassment" of the
political chaos that climaxed in the invasion. "At that time Lesotho
did not have a strong voice at the negotiating table, with South
Africa or any other country. Political instability had rendered us
powerless," he said.

Thamae Lenka of the Maseru-based Transformation Resource Centre, a
local human rights advocacy organisation, said Lesotho had a
"fragmented, indecisive leadership that was vulnerable to external
pressure" and was "too feeble to stand up to South Africa".

But the perception of South African arm-twisting is challenged by
Nqosa Mahao, a University of South Africa law academic who was born in
Lesotho.

Arm's length

Mahao said South Africa "could not exercise leverage" in 1999 because
the ANC government's relations with the ruling party at that time were
poor.

"I personally doubt that South Africa had superiority at the
negotiations table in 1999. Even the then ruling Lesotho Congress for
Democracy kept the ANC at arm's length. That is common knowledge."

But South Africa undoubtedly has an intense interest in Lesotho's
water. Edna Molewa, the water affairs minister, lobbied for the
construction of Polihali Dam and South Africa will provide the
required R9-billion capital investment.

Construction is scheduled to kick off next year and 2018 has been set
as the completion date. The dam wall will be 165m high and the dam
will have a capacity of 2.2-billion cubic metres.

The Katse and Mohale dams transfer more than 40-million litres of
water into the Vaal River system a day and generate 72MW of
electricity for Lesotho.

The Vaal River is South Africa's most important water source,
supplying water to 60% of Gauteng's economy and nearly half the
residents of Gauteng and the Northern Cape.

Objections

The river also supplies water to Eskom's coal-fired power stations in
Mpumalanga, gold mines in North West and the Free State, and farmers
in Limpopo.

This will be the water project's third dam in a series of five that
will be completed in 2036 when the 50-year agreement between the two
governments expires.

On completion, the project will transfer more than two billion cubic
metres of water from Lesotho to South Africa annually.

The controversy over the 1999 agreement is not the only source of
tension between the two governments. Recently the M&G revealed that
South Africa was unhappy that Lesotho appointed a convicted fraudster,
Masupha Sole, to the water commission as a technical adviser.

Sole, former chief executive of the Lesotho Highlands Development
Authority, was sentenced in 2003 to 15 years in prison for receiving
bribes totalling R5-million from two international construction
consultancies.

After being paroled last year, he was appointed adviser to the
commission despite objections by Molewa and Lesotho's then main
opposition party, the All Basotho Convention, as well as the media.

Sputnik Ratau, spokesperson for South Africa's water affairs
department, referred the M&G's questions to the South African
representative at the water commission, Zodwa Dlamini. But he refused
to comment and said the South African high commissioner in Maseru,
Happy Mahlangu, was the person to answer questions. Mahlangu said the
questions should be put to the Lesotho government.

* Got a tip-off for us about this story? Email amabhungane@mg.co.za

The M&G Centre for Investigative Journalism (amaBhungane) produced
this story. All views are ours. See www.amabhungane.co.za for our
stories, activities and funding sources.
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