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Lesotho Water Project Expansion Costs May Increase by 15%

The cost to extend a project that brings water to South Africa’s industrial hub from Lesotho has risen about 15 percent to 9 billion rand ($1.02 billion) from a December 2010 estimate, a South African official said.

The cost increase from about 7.8 billion rand comes after the South African and Lesotho governments approved the second phase of the Lesotho Highlands Water Project last year. The extension includes construction of the 163.5-meter-high (536- foot) Polihali dam and a 38.2-kilometer (24-mile) tunnel linking it to Katse Dam.

“We are hoping that by November 2020 the water will be flowing into South Africa” from the new dam, Zodwa Dlamini, South Africa’s chief delegate to the Lesotho Highlands Water Commission, which oversees the project, told lawmakers in Cape Town today.

Lesotho, a landlocked mountainous kingdom of 2 million people south of Johannesburg, has sold about 10 billion cubic meters of water to South Africa for 4.24 billion rand in royalty payments.

The water is fed into the Vaal River system that supplies South Africa’s Gauteng province, which includes Johannesburg, the country’s largest city, and the capital Pretoria.

A project management unit is being established that will help select companies to design and build the new dam and tunnels, Dlamini said.

Project managers are also considering the viability of a 1,200-megawatt hydropower project that will entail building a 101-meter-high dam at Kobong and linking it to the Katse dam by a 6.3-kilometer tunnel, with electricity generated via a pump- storage facility.

Lesotho’s government will pay for the power project if it goes ahead, Dlamini said.

To contact the reporter on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net;

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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