The second phase

12 November 2018

The Lesotho Highlands Development Authority (LHDA) provides information on the Lesotho Highlands Water Project, and details on how work is progressing on Phase II

The Lesotho Highlands Water Project (LHWP) is one of the world’s most successful regional water resources management schemes, a partnership between the governments of South Africa and Lesotho initiated in the 1980s for the mutual benefit of the two countries. Gauteng, South Africa, receives much needed water and Lesotho generates hydropower and recieves royalties from the water transfer, and the country has benefited from project related ancillary developments like aquaculture. Skills transfer and capacity building to enable Lesotho to manage and maintain the infrastructure within the country and the development of future LHWP phases was also a consideration. 

Lesotho is a mountainous country surrounded by South Africa and is richly endowed with an abundance of water. In the early 80s when the viability of the LHWP was being assessed, less than 6% of Lesotho’s water was being used domestically, with the remainder running through South Africa towards the sea. 

In contrast, South Africa is classified as a water scarce country. During the mid-1980s, with water needs growing particularly in the industrial hub of Gauteng, it was determined that the Lesotho Highlands Water Project was the least-cost solution to meet water demand in Gauteng of the several inter basin transfer systems being assessed at that time. Through a series of dams and tunnels, the LHWP would divert a portion of the water leaving Lesotho in the Senqu(Orange) River northwards to the Vaal River Basin in Gauteng, and utilise the water delivery system to generate hydropower for Lesotho. 

The aim of the envisaged multi-phased Lesotho Highlands Water Project is ultimately to transfer 70 cubic metres of water per second to South Africa, and in the process, to secure a sustainable, independent energy supply for Lesotho that will meet the country’s electricity requirements, and earn the mountain kingdom revenue in the form of royalties on the water transferred to South Africa. 

In 1986 Lesotho and South Africa signed the Treaty which governs the LHWP. The Treaty committed the two countries to the implementation of Phase I. Phase I – completed in stages 1A and 1B – would transfer 30m3 of water per second. 

The Phase I engineering works included the Katse dam, transfer tunnel, ‘Muela hydro station, ‘Muela dam, the north and south delivery tunnels, the Ash River outfall, Mohale dam and tunnel, and the Matsoku weir and tunnel, and advance infrastructure such as access roads, bridges, project housing, bulk power and telecommunications infrastructure etc. Water transfer from Phase I commenced in January1998; hydropower delivery started in January 1999. 

The 1986 Treaty committed the two countries to the implementation of Phase I of the Lesotho Highlands Water Project only,  subsequent phases of the Lesotho Highlands Water project to be agreed upon hence the signing of the Phase II Agreement in 2011. 

The Agreement was subsequently ratified by the two governments in mid-2013. This was followed by the appointment of the specialist Project Management Unit within the LHDA in July 2013 to oversee the implementation of Phase II and the practical commencement of Phase II. 

The costs of the LHWP are borne by the two governments: South Africa funds the infrastructure and social and environmental programmes related to the water transfer component; Lesotho funds the hydropower infrastructure and associated environment and social costs. Each country is responsible for ancillary developments in their respective countries. 

Currently, the LHWP transfers 780 million m3 of water per year to South Africa. Phase II will increase the volume incrementally to 1 270 million m3 per year. The ‘Muela hydropower plant currently produces 72MW of power and Phase II will increase the amount of electricity generated. 

The average royalty earnings on the transfer of water for the last two years was M870/R870 million.

Phase II

Phase II of the project comprises water transfer and hydropower components. In addition, the project includes advance infrastructure such as roads, bridges, housing, power and telecommunications networks that support project implementation and benefit Lesotho in the long term. 

The water transfer component includes:

  • The Polihali dam to be built downstream of the confluence of the Khubelu and Senqu rivers in the Mokhotlong district in the Eastern highlands of Lesotho.
  • A 38km long water transfer tunnel which will link the Polihali reservoir to the Katse reservoir.
  • Roads, bridges, high tension power lines and telecommunications systems, accommodation and construction facilities which form the advance infrastructure that will largely be completed before the construction of the dam and tunnel commences.

The exact form of the hydropower component is still to be agreed following the completion of further feasibility studies, which commenced in the latter part of 2016 and are currently at an advanced stage. The studies have looked at pumped storage and conventional hydropower options. The pumped storage scheme has been deferred due to various reasons which include its long term economic viability. Conventional hydropower, therefore, is the more feasible option to meet Lesotho’s energy needs. To this end, the decision was taken to advance the studies for three options to bankability stage earlier this year: two on the Senqu River and the third at Oxbow. These studies are expected to be completed by the end of 2018.

An environmental and social management programme is being implemented to address potential environmental and social impacts associated with Phase II activities. It includes four baseline studies – socio-economic, instream flow requirements, biological and archeological, and public health which were completed in 2013 and 2014; environmental and social impact assessments and the development and implementation of environmental and social management plans; resettlement assessments, the development and implementation of resettlement actions plans including livelihood restoration programmes and compensation; the development and implementation of public health action plans. The design of these programmes is being informed by the outcome of the baseline studies and extensive engagement with local communities and other interested parties. The resultant sustainable development programmes to be designed and implemented will be agreed on with the affected communities.

Company involvement

Given the scale and scope of Phase II, local, regional and international firms and experts are likely to be involved in the delivery of most of the project elements. 

Ultimately, the Project aims to comply with the mandate of Articles 10 and 11 of the Phase II Agreement. 

Consultants are also required to develop skills development and technology transfer programmes for their staff which will be implemented for the duration of the contract as well as provide opportunities for young professionals who will be mentored and trained by key staff. The objective being that they achieve significant career progression on LHWP Phase II for post construction operations and maintenance with the LHWP as well as further afield.

The Phase II Procurement Policy and Guidelines are embedded in all Requests for Proposals. Targets are specified in contracts and the attainment of specified targets will be carefully monitored across all contracts.

At a construction level, the Procurement Policy directs the Lesotho Highlands Development Authority to ensure that firms which seek to employ labour confirm to the following principles:

  • Unskilled labour – Only Lesotho nationals sourced from the project area and other areas within Lesotho
  • Skilled and semi-skilled labour – Opportunities to be made available to Lesotho nationals, and be extended to South African nationals should the required skills not be available in Lesotho
  • Professional and technical support staff – Preference to be given to nationals of Lesotho, South Africa, the SADC states and worldwide, in that order, provided that the required skills and experience levels are met. 

Cultural Heritage Plan

In November 2017, the LHDA appointed PGS Heritage (Pty) Ltd to develop and implement a comprehensive Cultural Heritage Plan that will protect and manage Lesotho’s cultural heritage during the construction and operation of the Phase II of the LHWP. Valued at approximately R27 million/M27 million, it is a significant project spanning five years. Its objectives include promoting the protection of cultural heritage sites and artefacts; Stone Age occupations sites, mainly rock shelters; Iron Age settlements, some of which are still inhabited; rock art; preserving the nation’s oral history and raising national cultural heritage awareness. 

PGS commenced activities with a site visit in early 2018 to get a better understanding of the cultural heritage resources and to inform the project’s inception phase. PGS has established its base camp i.e. site offices, work station and laboratory just outside Mokhotlong, and the team has been introduced to local community leadership structures which is a critical precursor to any field work. 

Intangible heritage surveys in local villages that will be inundated or affected by construction activities have commenced, the focus being on the sites that will be first affected by construction of the advance infrastructure. The Lesotho Department of Culture has granted the LHDA an excavation permit, facilitating the start of excavation work. 

Other social and cultural work 

As with most large scale infrastructure development projects, Phase II will have an impact on many people in the project area most of whom are subsistence farmers living on ancestral land. 

The LHDA is sensitive to the importance of land ownership and to the impact of compulsory land acquisition on people living in the project area, and is implementing measures to ensure that people affected by the project will be enabled to maintain a standard of living not inferior to what it was prior to disturbance by the project. Therefore, programmes to mitigate the impact of the project are being implemented as critical components of Phase II.

The expropriation will necessitate the resettlement and compensation of some households who will lose their homes and their economic resource, and compensation for the loss of economic resource for others. The exact numbers of households affected are being determined in the resettlement planning process which is currently underway. The planning process involves working closely with community leadership structures and individual households to identify all affected people; to register and verify their assets for compensation purposes, and to prepare compensation and mitigation agreements with them for the loss of their assets. The identification of resettlement areas, designing and constructing replacement housing and assistance with physical relocation are part of the resettlement actions to be implemented. Every aspect of the process involves extensive consultation with the affected peoples. 

In developing the Phase II Compensation Policy the LHDA has considered the lessons learned from Phase I, the recommendations of the Phase II feasibility study, the laws of the land and the parameters of the Phase I Compensation Policy and the inputs of local communities, their representatives, the NGO community and other interested parties including the Panel of Experts to ensure that it has been an inclusive process and that it aligns with recognised international standards. 

A livelihood restoration programme complements resettlement and compensation to help mitigate the impact of resettlement of affected communities. Now at an advanced stage of planning with pilot/demonstration projects set to commence in the affected areas during the year, it offers support to affected households through projects of their choice with advice from LHDA and external experts. These projects will include land-based (crop and livestock production), wage-based (construction skills training programme) and enterprise-based (income generating projects such as vegetable tunnels, village chickens and apiculture) options. 

A Social Development Master Plan will be prepared and implemented in consultation with local communities and key government and non-government stakeholders to ensure that the projects address the needs of the people concerned and have potential for viability and sustainability. 

Financial education programmes are on-going to equip communities with relevant information and skills in managing their compensation in a sustainable manner.

Engineering work 

The engineering work has been split into a number of different contracts, details of which are included below: 

Advance infrastructure

  • Contract 3017 – Demarcation of the Polihali Reservoir: The reservoir demarcation entailed surveying the approximately 230km perimeter of the Polihali reservoir at 2080m asl– 5m above the projected full supply level, a safe margin. The demarcation of the reservoir area is critical for the acquisition of land, resettlement and compensation of people in the catchment area whose homes and livelihoods will be affected by the construction of the dam. It is also essential for the planning of the Phase II activities. The Maleka, Ntshihlele, Putsoa Joint Venture, a local Lesotho firm, was appointed to install the beacons. The construction of the beacons to mark the perimeter of the Polihali reservoir began during the winter of 2015. The construction of the more than 1 300 beacons was completed ahead of time in December 2015.
  • Contract 3014 – Professional Services for the Design and Construction Supervision of the Polihali North East Access Road: This contract is for the upgrade and widening of the existing road to a standard appropriate to provide a road suitable to facilitate the safe movement of construction vehicles during the mobilization of the dam and tunnel contractors. It was awarded to the SMEC-FMA Joint Venture. Construction procurement has commenced with the tender having been advertised in the last quarter of 2017. 
  • Contract 3004 – Professional Services for the Planning, Design and Construction Supervision of the Polihali Western Access Road (PWAR): The LHDA awarded the contract for the Polihali Western Access Road to AECOM SA (Pty) Ltd, working with AECOM Lesotho (Pty) Ltd and Lesotho-based sub-consultants RWB Consulting Engineers. The new asphalt-surfaced road will provide access to the main Phase II construction sites for construction vehicles and heavy machinery like the tunnel boring machine. The project commenced in October 2016 and is expected to be completed in four years. The tenders for the construction of the PWAR East and West were advertised in the second quarter of 2018.
  • Contract 3009 – Professional Services for the Planning, Design and Construction Supervision of the Housing and Associated Infrastructure: Polihali Infrastructure Consultants (Pty) Ltd, comprising Mott MacDonald PDNA and Khatleli Tomane Moteane in joint venture, were awarded Contract 3009 for the master planning, design and construction supervision of the Phase II housing and associated infrastructure. The services should be completed in the latter part of 2021. The project housing works comprise accommodation facilities for the staff and labour force, site offices, operations building, visitors centre and associated infrastructure such as roads and utilities. The procurement for the construction of the infrastructure civil works (this includes roads, water and waste water systems, electricity and telecoms supply) is nearing completion.

This will shortly be followed by the advertising of the tender for the construction of houses, lodge and operation centre. 

  • Contract 3008 – Professional Services for the Design and Construction Supervision of the Bulk Power Supply and Telecommunications: The four-year power and telecommunications infrastructure contract went to a joint venture between South African-based Plantech and SM Consulting, a Lesotho-based engineering consultancy. It is envisaged that fibre optic telecoms cables will piggy back on the existing powerlines from Maputsoe to Katse and on the powerlines to be erected from Maputsoe to Polihali along the corridor created by the Polihali Western Access Road, to provide the power and telecommunications critical to the dam and tunnel construction lines. The new powerline is needed to supply the Tunnel Boring Machines (TBMs) and all the equipment at the construction sites such as aggregate crushing plants, concrete batch plants, tunnel ventilation systems and workshops. This infrastructure will enhance existing network to the nation and will be operated by the Lesotho Electricity Company. The works procurement for the construction and relocation of power lines is underway.
  • Contract 3020 – Professional services for the design and construction supervision of Phase II major bridges: Procurement is underway. 

Polihali Transfer Tunnel and Polihali Diversion Tunnels

  • Contract 3022 – Professional Services for the Design and Construction Supervision of the Polihali Diversion Tunnels: The successful bidder on the diversion tunnels is the Metsi a Senqu-Khubelu Consultants Joint Venture which comprises a number of prominent engineering consultancies including Aurecon (SA), Knight Piesold (SA), Hatch Goba (SA) and SMEC (SA) and the Lesotho firm, FM Associates. The contract commenced in September 2016 and will be completed in approximately 3.5 years. The diversion tunnel construction procurement commenced in the last quarter of 2017.
  • Contract 3007 – Professional services for the design and construction supervision of the 38 km long Polihali transfer tunnel: Although announced to the public in January 2018, the LHDA awarded the contract for designing and supervising the construction of the Polihali water transfer tunnel, the largest of all the Phase II engineering design contracts, to the Metsi a Senqu-Khubelu Consultants (MSKC) joint venture in the latter part of December 2017. Valued at approximately M900 million, the transfer tunnel design and construction supervision contract is a significant milestone in the implementation of Phase II. MSKC comprises Lesotho-based FM Associates (Pty) Ltd, and South African firms Aurecon South Africa (Pty) Ltd, Hatch Africa (Pry) Ltd, Knight Piesold (Pty) Ltd and SMEC South Africa (Pty) Ltd. Sub- consultants include White Life Consultants (Pty) Ltd, Lesotho; S5 Construction Consultants, Lesotho; and ILISO Consulting (Pty) Ltd, South Africa. The consultant’s scope of services includes reviewing the existing project information and preparing the preliminary design of the transfer tunnel; preparing the tender design for the construction of the tunnel, tender drawings and tender documents; supporting the LHDA through the contractor tender and contract award process, preparing construction design and drawings, and providing contract management services during the construction of the tunnel. Construction of the tunnel is expected to commence in 2020 and to be completed by the end of 2025. 

Both tunnel boring and drill and blast methods will be used to excavate the main tunnel and various access adits and lake tap.

Polihali Dam and Appurtenant Works

  • Contract 3015 – Professional Services for the Evaluation, Optimisation, and Site Supervision of Geotechnical Investigations: This contract was awarded to a geotechnical engineer – Jeffares & Green (Pty) Ltd (now known as JG Afrika) in association with GWC Consulting Engineers – whose role it was to oversee the work done by the drilling contractor, Diabor (Pty) Ltd who were appointed in the latter part of 2015. 
  • Contract 4016 – Geotechnical Investigations for the Polihal Dam and Transfer Tunnel: The geotechnical investigations are necessary to confirm the geological conditions and identify any anomalies in the dam foundations as well as along the tunnel alignment. The results inform the design of the dam and tunnel. The investigations will take place in two stages, with stage 1 having been completed early in 2017. Stage 2 of the geotechnical investigations is underway following the appointment of the dam engineer in late June 2017.
  • Contract 3006 – Professional Services for the design and construction supervision of the Polihali Dam: The contract was awarded to the Matla a Metsi joint venture in June 2017. The joint venture, which combines Lesotho, South African and international experts, comprises GIBB (Pty) Ltd, Mott MacDonald Africa (Pty) Ltd (both from South Afrca), Tractebel Engineering SA/Coyne et Bellier (France), and LYMA Consulting Engineers (Lesotho). The scope of services includes reviewing the geotechnical and other project information, the engineering design of the Polihali Dam and appurtenant structures, the procurement of construction contracts and supervising the construction on behalf of the client. Skills development and technology transfer to Lesotho and South African nationals and the training of LHDA staff for the purposes of operating the dam are important components of the consultancy contract. Work commenced in July 2017. The design of the dam will take approximately eighteen months and will be followed by the procurement of the construction contractor. The dam construction is expected to commence in the first half of 2020. Construction is expected to be completed in May 2025, with impoundment starting in late 2024. Water transfer is scheduled to commence in 2026 once the transfer tunnel has been commissioned.


  • Contract 3010 – Professional Services for the Phase II Hydropower Feasibility, Further Studies: The contract was awarded to EDF Hydro Engineering Centre working with GIBB (Pty) Ltd, Multiconsult UK Ltd and Lesotho-based, LYMA. Work on the studies, which are expected to be completed in 2018, commenced in October 2016 and the studies are at an advanced stage.


  • Contract 6004 – Professional Services for the Environmental and Social Impact Assessment (ESIA) for the Polihali Western Access Corridor (PWAC): The contract was awarded to Environmental Resources Management Southern Africa and Lesotho-based, Sechaba Consultants. The contract commenced in September 2016. In March 2018 the Lesotho Ministry of Tourism, Environment and Culture issued LHDA with a Record of Decision comprising environmental authorisation for the proposed Polihali Western Access Corridor, following the completion of the PWAC ESIA and the associated Environmental Management Plan and effectively granting environmental authorisation to proceed with the PWAC construction activities.
  • Contract 6014 – Professional Services for the Environmental and Social Impact Assessment for the Polihali Dam, Saddle Dam and Reservoir, Quarries and Borrow Pits, Eastern Transfer Tunnel, Major Bridges and Project Housing and Site Establishment: The first and biggest of the two ESIA contracts in Phase II, it was awarded to Environmental Resources Management Southern Africa (Pty) Ltd in August 2016. The contract will see the ESIA consultant working closely with other Lesotho Highlands Water Project (LHWP) consultants responsible for the social, environmental, cultural heritage, public health and engineering services of Phase II of the Project. The ESIAs will inform site selection, engineering designs, construction specifications, as well as the environmental and social monitoring requirements. 
  • Contract 6025 – Cultural Heritage Plan: In November 2017, the LHDA appointed appointed PGS Heritage (Pty) Ltd to develop and implement a comprehensive Cultural Heritage Plan that will protect and manage Lesotho’s rich cultural heritage during the construction and operation of the Phase II of the Lesotho Highlands Water Project. Valued at approximately M27 million, it is a significant project spanning five years. Its objectives include promoting the protection of cultural heritage sites and artefacts such as burial sites; Stone Age occupation sites, mainly in rock shelters, and settlements dating back to the Iron Age, some of which are still inhabited; rock art; preserving the nation’s oral history and raising national cultural heritage awareness. The cultural heritage fieldwork has commenced. 

Socio-economic Development and Resettlement 

  • Contract 6006 – Professional Services for Resettlement Planning and Implementation in the Polihali Western Access Corridor. The contract was awarded to Makhetha Development Consultants (Pty) Ltd. Asset registration is underway. 
  • Contract 6013 – Professional Services for the Geotechnical Investigations and Polihali North East Access Road Resettlement Planning and Implementation. This is a land acquisition and compensation programme being implemented in-house by the LHDA. Asset registration has been completed and the verification process is underway.
  • Contract 6015 – Professional Services for Resettlement Planning and Implementation: Polihali Site Establishment and Reservoir Area: The overall objective of the assignment is to prepare and implement a resettlement programme to address the involuntary resettlement impacts associated with the project components. Phase II will inevitably necessitate permanent land acquisition and involuntary resettlement – both physical and economic displacement of households. Most of this will be caused by the construction of the Polihali dam and reservoir. located in the Mokhotlong district, which will inundate some 5000 ha of land in the valleys and tributary catchments of the Senqu and Khubelu Rivers at a full supply level of 2 075 metres above sea level. Permanent land acquisition will also be necessary for associated infrastructure developments such as access roads, power lines and permanent office and residential facilities. Temporary occupation of land will occur during the construction period for facilities such as labour camps and works areas. The contract was awarded to the Lima Rural Development-Thaha Joint Venture, a joint venture between the Lima Rural Development Foundation and Thaha Projects. It commenced in September 2016 and will take approximately 5.5 years to complete. Asset registration for households affected by the advanced infrastructure is underway. 

Project funding

The 1986 Treaty and the Phase II Agreement specify the cost allocation in detail. The South African government, through the Trans Caledon Tunnel Authority (TCTA), is responsible for the infrastructure development costs associated with the Phase II water transfer component, including livelihood restoration and compensation costs and the costs of the environmental and public health programmes.

The Lesotho government pays the costs of the hydropower component, which are over and above the hydropower benefits that will accrue from the Phase II water delivery component.

How is the project progressing?

Bi-national, multi-disciplinary projects are complex by nature, requiring robust project management processes, rigorous adherence to timeframes and effective communication. The LHWP is no exception to this and while the project is behind the timelines proposed in the Feasibility Report, given the two-year deferred start, Phase II is making steady progress. In summary, 27 contracts are in force covering a range of environmental impact assessments, socio-economic and resettlement projects, hydropower feasibility, advance infrastructure projects encompassing access roads, project housing, power and telecommunications, geotechnical investigations and the Polihali diversion tunnel, and the main works i.e. the Polihali dam and transfer tunnel. Other than the geotechnical driller and the demarcation survey, these are all consulting services contracts. 

The project is now beginning to move into the design and construction phase, with the first three of approximately 20 construction contracts across many disciplines including roads, bridges, housing, power and water supply, and waste management, among others, having gone out to the market in the last quarter of 2017. Procurement on a couple more construction contracts commenced earlier this year. 

Construction of the advance infrastructure components is expected to commence in 2018 and will be largely completed before the start of the main works in 2020.

Based on current projections, the completion of the dam is scheduled for early May 2025 with the tunnel expected to be completed in December 2025.

Further phases

The LHWP was envisaged as a multi-phased project. The Treaty states that the project will be implemented by way of any or all of the phases as described in the Treaty, or such additional phases as may be required to deliver 70m3 of water per second. The phases described in the Treaty may be modified by agreement between the two countries. ?


Polihali Dam site Polihali Dam site
Geotechnical drilling Geotechnical drilling
Donkeys Donkeys used to carry the material for the reservoir demarcation in the very mountainous terrain
Farmer with his livestock Farmer with his livestock
Assets Asset registration, a critical component of the relocation and compensation of people in the construction area
Donkeys Donkeys used to carry the material for the reservoir demarcation in the very mountainous terrain
Lesotho landscape Lesotho landscape
Winter Winter scene in the highlands of Lesotho, overlooking Mohale Dam

Privacy Policy
We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.