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Lesotho Contractors Challenge Polihali Dam Project Awards, Citing Unfair Treatment

Published January 01, 2024
7 months ago

The development of the Polihali Dam, an integral part of the Lesotho Highlands Water Project (LHWP), is facing potential setbacks due to legal action taken by a group of Lesotho contractors. The Consortium of Lesotho Contractors is challenging the awarding of contracts for the dam’s construction, claiming prejudicial treatment and a breach of the bilateral treaty between Lesotho and South Africa, which mandates equitable sharing of work between contractors of both nations.

The consortium, which includes thirty Basotho-owned construction firms such as Lesotho Consolidated Civil Constructors, Sigma Construction, Matekane Transport and Plant Hire, and Moradi Crushers, has approached the Lesotho High Court with an urgent application. They assert that the current adjudication process for construction contracts, collectively worth over a billion rands, is skewed towards South African entities at the detriment of local Lesotho companies.

Scheduled for completion in 2025 after a series of delays, the Polihali Dam is expected to significantly boost Gauteng’s water supply—increasing annual availability from 780-million to 1 255-million cubic meters. This project is a continuation of the LHWP, which completed its first phase in 2003 and intends to bolster water security and hydropower generation in the region.

The mammoth undertaking of the Phase two project, valued at approximately R24-billion, is managed by the Lesotho Highlands Development Authority along with the Lesotho Highlands Water Commission. South African companies, including the WBHO/LSP Joint Venture and several others, have submitted bids for the project.

The Consortium of Lesotho Contractors has raised issues with the appointment of service providers for various project-related contracts, including the design of the Polihali Dam and its tunnels. The consortium requests the court to declare the evaluation criteria for three tenders in breach of the stipulations of the LHWP Project Phase II Agreement. They seek not only an injunction against the ongoing procurement processes but also a revision and re-advertisement of the tenders.

The core of the grievance lies in the categorization table used by the authority, which parallels the South African system but does not align with the Lesotho government’s construction grading standards. Mokhele Likate, the consortium’s chairman, has stressed that the highest-ranked local firms would be placed lowly on this table—an act that, according to him, prohibits Basotho nationals and companies from qualifying and contravenes the bilateral treaty.

According to Likate, these actions neglect the duty of capacitating local businesses and compromise domestic construction grading standards. The consortium has emphasized the importance of shared infrastructure work and operational experience, as stated in article 10 of the bilateral treaty.

In addition to the 165m high concrete-faced rockfill Polihali Dam and a 38km connecting tunnel, the project scope includes constructing advance infrastructure like roads, accommodation, power lines, telecommunication networks, and health facilities. The environmental and social impacts are to be mitigated meticulously alongside plans to enhance hydropower capabilities.

An upcoming hearing is scheduled for April 19, where the commercial court's Judge Lisebo Chaka-Makhooane will determine the case's proceedings. This story was provided by the amaBhungane Centre for Investigative Journalism.

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