…as the royalties are doubled after recalculation
Mohloai Mpesi
LESOTHO will now earn a generous M298 million monthly in royalties for sending water to South Africa’s economic hub, Gauteng, under the Lesotho Highlands Water Project (LHWP).
This is more than double the M130 million the country has been getting monthly over several years for sending its precious gold to South Africa.
The shot in the arm comes after a review and recalculation of the water royalties undertaken by the Lesotho and South African governments on the 13th of March 2024.
The move is likely to mollify many Basotho, who have been complaining that the country was being ripped off by its giant neighbour that wholly surrounds it.
The monthly royalties had been considered too low considering that Gauteng, an industrial hub, and South Africa’s richest province, would go dry without Lesotho’s water.
The recalculation was done to adjust the monthly water royalties that the government of Lesotho gets from South Africa through the LHWP’s Phase I involving Katse and Mohale Dams.
Minister of Natural Resources, Mohlomi Moleko, who spoke to the Lesotho Times yesterday from Mayfair, London, where he is currently visiting on official business, confirmed Lesotho would going forward be receiving more than double what it has been earning from SA since the inception of the LHWP Treaty.
The increased rate was agreed to between the two countries at their ministerial meeting in Maseru in March 2024. The deal was struck between Mr Moleko and his South African counterpart, Minister of Water and Sanitation, Senzo Mchunu.
An advisor to the Ministry of Natural Resources, Masupha Sole, said the recalculation was also a prelude to the proposed review of the LHWP Treaty by two countries.
The LHWP Treaty was signed between the Kingdom of Lesotho’s then military junta led by Major-General Metsing Lekhanya and the Republic of South Africa’s white apartheid regime on the 24th of October 1986.
Under the treaty, the countries kicked off construction of Katse and ‘Muela Dams which were completed in 1998 under Phase 1A of the LHWP. This was followed by the construction of Mohale Dam under Phase 1B of the project.
The dams deliver water to Gauteng which is in dire need of the precious commodity.
At inception, the project was designed to include four phases, which were to be implemented over a period of 30 years. They were expected to ultimately transfer about 70 cubic meters of water per second to SA while generating hydropower electricity for Lesotho.
In return for the water transferred to SA, Lesotho receives royalties on monthly basis.
Feasibility studies for LHWP Phase II began in October 2005 and was completed in May 2008.
An agreement to embark on the construction of Polihali Dam in Mokhotlong under that Phase II was concluded in August 2011.
Polihali Dam, whose construction only started in May 2023, will create a reservoir on the Senqu and Khubelu rivers with a surface area of 5,053 hectares and a full supply storage capacity of 2,325 million cubic metres.
The Polihali Dam infrastructure includes a spillway, a compensation outlet structure, and a small hydropower station.
Polihali Dam is set to have an embankment standing at 166 meters high, crest length of 921 metres and crest width of 9 metres.
Mr Moleko also told this publication that the deal signed between the two countries made provision for the recalculation of the water royalties payable by South Africa to Lesotho “depending on a number of factors”.
“In 2022, an exercise to recalculate the water royalties was undertaken as a result of the adjustments in the minimum annual quantities of water delivery, due to Phase II of the Lesotho Highlands Water Project changing from Mashai Dam to Polihali Dam,” Mr Moleko said.
“The exercise incorporated a number of assumptions and concluded that the monthly water royalties rate should be increased. The new rate has resulted with the water royalties increasing to more than double the amount we received before.”
Mr Moleko had told the Lesotho Times on 8 April 2024 that the Lesotho government had engaged the government of South Africa about reviewing the LHWP Treaty. According to Mr Moleko, the document had not been reviewed since the project’s inception 38 years ago.
He had however, declined to divulge points of interest in the LHWP Treaty that Lesotho wanted reviewed.
As per clause 18 of the LHWP Treaty, titled “Review and Revision,” the Treaty should by right be “reviewed and revised after every 12 years”.
Mr Moleko had said they were in the process of setting up a team that would work on the review and revision of the Treaty. It would include experts from outside the country.
“We are going to beef up that team with consultants coming from outside the country. That team will be set up within a month. But the process has started because we have written to our counterparts that we should do a timetable of when we will start reviewing this treaty……
“We mentioned that before the 24th of May, we should come to an agreement (of when to start the review and revision),” he had said.
The Lesotho Times followed up the issue with Mr Sole, who is well-versed about the LHWP Treaty, as he was actively involved in its formulation and oversaw the implementation of its Phase 1.
He confirmed that Lesotho was currently earning M130 million in monthly water royalties from SA.
Following the recalculation the country would now earn an improved M298 million monthly.
Mr Sole said the Treaty allowed for water royalties to be recalculated when the review and revision was closer to being initiated.
“Lesotho was earning M130 million per month, now it is going to get M298 million, close to M300 million,” Mr Sole said.
“When the Treaty was signed, the rate of royalties was only estimated. Whenever we are closer to reviewing and revising it, we can make a recalculation of royalties. It is there in the Treaty.”
Mr Sole said they were waiting for Prime Minister Sam Matekane to return from his sick leave to make a public announcement on the commencement of the Treaty review and revision by both parties.
“We are currently waiting for the Prime Minister to return to work from his sick leave, so that he can make a public announcement. Lesotho consulted South Africa in January about reviewing the Treaty. Preparations are underway,” Mr Sole said.
“In the Treaty, there is Article 18 titled ‘Review and Revision’ which is supposed to be done every 12 years, as and when the parties agree.”
He added that when the Treaty that had not been reviewed holistically since its inception 38 years ago was formulated, included in it were four protocols. Two more protocols were added to it in 1999.
“Since 1986, Article 18 has never been evoked. There were four protocols that were made when the Treaty was signed. All these protocols were part of the Treaty,” Mr Sole said.
“In 1999, protocol five which talked about taxes was added, while protocol six, which talked about the governance of Highlands Water Project was also added.”
“Those changes were not made because of Article 18, but as a result of a request from the Republic of South Africa.”
Added Mr Sole: “So right now, the government of Lesotho requested that Article 18 should be invoked. We are now on the 38th year of the existence of the Treaty, yet it has not been reviewed and revised. That is going to happen, and Basotho will be told how they will participate in the process. Just like in the (current) national reforms process.”
In 1986, the public was denied the privilege to participate in the formulation and signing of the Treaty due to the conduct of South Africa’s apartheid regime and Lesotho’s own military junta under the leadership of the late Major-General Lekhanya.
The undemocratic nature of the two regimes ensured that public participation was excluded despite the vital nature of the Treaty project to the two countries.
