/ 7 December 2012

Water deal irks Lesotho’s new rulers

Controversy continues to stalk the bilateral Lesotho Highlands water scheme.
Controversy continues to stalk the bilateral Lesotho Highlands water scheme.

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.

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.

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.

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 [email protected]

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.