Lesotho Highlands Water Project Phase II: Overview & Update

A shed housing the water treatment plant Diversion tunnel outlets

Phase II of the Lesotho Highlands Water Project (LHWP) comprises the construction of the Polihali Dam and reservoir, water transfer tunnel and the associated access roads, bridges, accommodation, electrical transmission lines and telecommunications infrastructure.

Lesotho Highlands Water Project Phase II:

Overview & Update

The LHWP Phase II builds on the successful completion of Phase I in 2003. It delivers water to the Gauteng region of South Africa and uses the water delivery system to generate electricity for Lesotho.

Polihali diversion tunnels

The two diversion tunnels were constructed in preparation for the Polihali Dam construction and ahead of the appointment of the dam contractor. The Lesotho Highlands Development Authority (LHDA) celebrated the double breakthrough of the tunnels in August 2021, marking the completion of 1 870 m of excavation. Excavation inside the two Polihali diversion tunnels commenced in June 2020 and mostly advanced from the outlets. Construction was completed in November 2021. The contractor and consultant have demobilised from site.

Bulk power

The electrical infrastructure required for the Phase II development includes the construction of new substations, upgrading of existing Lesotho Electricity Company (LEC) substations, the construction of new power lines, and the diversion of the existing LEC 33 kV distribution network between Letšeng and Mokhotlong, which is below the Polihali Dam full supply level. A 33 kV power line of 2.2 km from Tlokoeng to Polihali to supply early power for the advance infrastructure contracts and the Polihali village prior to the completion of the main power from Matsoku was completed in June 2021. The construction of a 38 km 132 kV transmission line between Matsoku substation and the new substation at Polihali have been completed and both were energised in mid-January 2022.

Polihali and Katse infrastructure works

The works at Polihali and Katse – including the potable water supply system and sewer reticulation to permanent and temporary residential areas, water treatment facilities, access roads and street lighting – are complete.

Environmental milestones

Environmental and social impact assessments and environmental management plans for the Polihali Western Access Road (PWAC) and associated infrastructure are completed.

Records of decision (RoDs) authorising the construction of the Polihali Dam, Polihali Transfer Tunnel, PWAC and its associated components have been granted by Lesotho’s Ministry of Tourism, Environment and Culture.

Furthermore, the environmental management plans have been approved, while the RoDs for the Polihali North East Access Road (PNEAR), the construction of the diversion tunnels and for the quarries and borrow pits associated with the major components like the Polihali Dam and Polihali Transfer Tunnel and the major bridges have been granted.

Procurement milestones

Main works milestones include the procurement of the contractors for the Polihali Dam, Polihali Transfer Tunnel and major bridges. The award of the contracts is expected in 2022.

The completion of additional hydropower feasibility studies and the Lesotho government’s approval to proceed with

the procuring of a service provider for the detailed design and supervision of the oxbow hydropower scheme are further main works milestones.

Recent advance infrastructure construction tenders awarded include those for the Katse Lodge and Katse Village upgrades, and the construction of the Polihali Village. Construction work has commenced on these two components.

Changes in the overall design/construction programme

Projected milestones as per the current master programme are as follows: • Impoundment of the dam: June 2025. • Water delivery (tunnel): December 2027. Several factors have contributed to the programme changes. These include the complex decision-making processes, the cancellation and repeat of some procurements, and Covid-19 – which brought the LHWP to a halt for a period. Activities then resumed with restrictions to protect LHDA employees, consultants, contractor teams and communities in the construction area. Adverse weather and community unrest also caused delays.

Construction under way

• Access roads: Construction of the PWAR

East and West, PNEAR and the Northern

Access Road is progressing but is behind schedule. • Housing: In recent months, construction has begun on the Katse Lodge and Katse

Village upgrades, and the construction of the Polihali Village. These are two of the four Phase II housing contracts packaged to enhance local participation, especially of small- and medium-sized contractors. Procurement is advanced for the construction of the Polihali

Operations Centre and the Polihali

Commercial Centre. • Bulk power: Upgrades to the substations at the Katse intake tower and Ha Lejone – and to the protection and control systems of the Maputsoe, Pitseng and

Matsoku diversion substations – are under way.

Revenue

Polihali Dam will add another 2 325 million m3 to the LHWP storage capacity. The current annual royalty revenue will increase when Polihali is commissioned, as the volume of water transferred to South Africa will increase incrementally from the current supply rate of 780 million m3 per annum to more than 1 270 million m3 per annum.

Royalty revenues on the transfer of water to South Africa will vary from year to year, depending on the volume of water transferred and inflation. At the end of 2021, the cumulative water transfer royalty revenue was M12.545 billion (at a 1:1 ratio to the South African rand).

The water conveyance system also generates electricity for Lesotho, which has reduced the country’s dependence on imported electricity, saving on import costs and contributing to the country’s GDP by stimulating local industry and economic growth. At the end of December 2021, the cumulative electricity sales revenue from the time the ‘Muela Hydropower Plant that was commissioned in 1998 amounted to M1.276 billion.

Community upliftment and skills transfer

Community upliftment and skills transfer are fundamental to the LHWP. Besides compensation for lost assets and the resettlement of affected households, livelihood restoration and social development programmes are being implemented.

The construction of the first replacement houses for households affected by the access roads and bulk power developments has started. There are also financial literacy education programmes to help communities affected by the implementation of Phase II to make informed choices about the use of their compensation funds, especially largesum compensation payments.

There is also a public health programme to sensitise communities, including high school students in the project area, to the potential impacts of an influx of people. This focuses on sexually transmitted diseases, pregnancy, sexual exploitation and abuse, as well as human trafficking.

Demonstration projects in the four community councils of Menoaneng, Mokhotlong Urban, Mphokojoane and Seate are being implemented to enhance capacity building and to illustrate viable projects than could be replicated by individual households and communities. These are already familiar activities such as the rearing of village chickens, vegetable production in protective tunnels and beekeeping.

Polihali diversion tunnels’ intake structures under construction

Contractors camp at Polihali

A social development master plan (SDMP) is in preparation. It involves intensive consultation with local communities to identify needs, priority projects for implementation, and the roles and responsibilities of stakeholders, among others. Projects within the SDMP could include water and sanitation, rural electrification, public health, agriculture, tourism, social protection, as well as educational enhancement such as skills and enterprise training and development.

All consultants and contractors are required to implement skills development and technology transfer programmes for their staff and to provide opportunities for young professionals to be mentored and trained. The young professionals are recruited through the LHDA’s Young Professionals Programme (YPP). The YPP is the LHDA’s skills transfer initiative that provides learning opportunities within Phase II of the LHWP for young professionals from Lesotho and South Africa. The programme targets young graduates from tertiary institutions with no work experience and aims to address the problem of an inadequate skills market.

The YPP builds on the rich legacy of a similar on-the-job-training programme that jump-started the engineering careers of young professionals under the first phase of the LHWP. Several of the former Phase I young professionals (interns) now hold executive positions at the LHDA or are project managers and resident engineers on Phase II consultancy and construction contracts. By February 2022, approximately 33 young professionals had been placed. The consultants and contractors are also required to include enterprise development in their work plans. This includes a training, development and mentoring plan for the small to medium enterprises.

On a construction level, unskilled labour is reserved for Lesotho nationals and may be sourced from across the country. Skilled and semi-skilled opportunities are made available to Lesotho nationals and then extended to South African nationals should the skills not be available within Lesotho. For professional and technical opportunities, preference is given to Lesotho nationals followed by South Africans and people from South African Development Community member states, and then international workers, in that order, provided the required skills and experience levels are met.

Polihali access road under construction