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dam-l LHWP loan delay/LS
The following is from the "Business Report" web site (http://www.busrep.co.za):
"Published in
Johannesburg,
Cape Town, Durban and
Pretoria by Independent
Newspapers.
582 000 Readers"
Threat to Lesotho dam project
Jonathan Rosenthal - (Thursday November 26, 1998)
Johannesburg - The World Bank has delayed signing,
and effectively threatened to withdraw, a
loan agreement to provide finance for phase 1b of the
$1,5 billion Lesotho Highlands Water
Project until compensation claims by highland
villagers and project governance issues are
resolved, sources close to the project said yesterday.
But Bank and project officials said there was no
chance of the Bank pulling out of the project.
The R10 billion development carries water from the
Lesotho Highlands into the Vaal river system to supply Gauteng.
Phase 1b of the project entails the construction of a
second dam and additional tunnels to increase the water supply from 18m3 a
second to 30m3 a second at a projected cost of $1,5 billion.
The $45 million World Bank loan was approved in June
this year. Well-informed sources said the Bank had presented a list of
additional conditions before the loan could be signed.
These included the appointment of Bank-approved
personnel to development teams in the highlands, the submission of a plan
to ensure the compensation of all villagers affected by the project and the
construction of new housing for
villagers whose houses were damaged or destroyed in
phase 1a of the project.
The list of additional conditions contradicts
numerous statements by the South African government over the past
months that outstanding compensation claims have been
attended to.
The Bank's ultimatum is the second in just more than
two years. It previously threatened to withdraw its support unless the
Lesotho Highlands Development Authority attended to the backlog of
compensation claims.
Although the $45 million loan is trivial in relation
to the total size of the project, it indicates to other investors the
soundness of the project.
Fani Zulu, a World Bank spokesman, said yesterday
that there were outstanding issues to be resolved but "we are
definitely going ahead".
George van der Merwe, a spokesman for the Trans
Caledon Tunnel Authority, which manages South Africa's funding of
the project, said a signing of the loan was expected
within weeks.
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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