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dam-l WCD submission on LHWP/LS
This paper was presented by David Letsie, who lives in Alexandra, at the
Southern African hearing for dam affected people, held Nov. 11-12 in Cape
Town, SA.
(Footnotes and appendix document omitted here, but supplied
upon request: pbond@wn.apc.org.)
The Lesotho Highlands Water Project
as seen from Johannesburg
Submission to the World Commission on Dams
11 November 1999, Cape Town
by David Letsie and Patrick Bond
Water from the Maluti Mountains of tiny, landlocked
Lesotho ordinarily tumbles down to the Orange River in
South Africa, across a vast stretch of extremely fertile
and then arid South African land, becomes the border with
Namibia and makes its way into the Atlantic Ocean. From
1998, the Lesotho Highlands Water Project (LHWP) began
diverting to the Johannesburg area what will amount to
a billion cubic meters of water annually--in Phases 1A
(complete) and 1B (under construction from 1998), which
cost US$4 billion--via dams and cross-catchment tunnels.
The water travels to the Vaal River and hence into an
industrial complex comprising the Vaal Triangle (home of
the steel industry), Johannesburg (Africa's largest
industrial complex) and Pretoria (South Africa's capital
city). In addition to farmers in Gauteng Province who
draw freely from the river (and residual water that
eventually joins the Orange River), 41% of the Vaal River
is drawn out by the Rand Water Authority (in 1995) and
distributed to middle- and upper-income consumers (36%),
low-income consumers (25%), industry (24%), mines (15%)
and other users (10%).
The LHWP was conceptualised during the 1950s colonial
era in Lesotho, but it was only in the mid-1980s that the
South African apartheid regime and Lesotho military-ruled
client-government signed an agreement whose financing and
socio-ecological technical work were arranged by the
World Bank. This occurred under conditions of anti-
apartheid financial sanctions so had to be done largely
surreptitiously, which the World Bank appreciated and
lubricated through a special London-based funding
mechanism. Indeed, the Bank (and allied northern
government aid agencies) had a long role in fostering
Lesotho's underdevelopment, partly through continually
denying the obvious linkage between systematic poverty
and the fact that more than half the country's GDP came
from remittances from workers in South African mines a
few hundred miles away. Bank and aid agency interventions
typically combined orthodox market-oriented rural
"modernisation" (which proved ineffectual) and the
strengthening of a repressive state apparatus.
Notwithstanding the importance of the aid industry,
Lesotho remains subservient to South Africa, reflected
in Pretoria's regular post-colonial manipulations of the
Maseru government. For example, in September 1998, a
rumoured coup (that seemed to have a substantial popular
backing) drew the SA National Defense Force into Lesotho.
The first site the SA army secured--while Maseru's
business district was being burned virtually to the
ground by angry rioters--was the Phase 1A Katse Dam,
which was rumoured to be a potential bombing target of
the coup plotters.
In addition to opposition from South Africa's African
National Congress (until it assumed power in 1994), the
LHWP has been criticised from three different but
parallel directions: by Lesotho communities, churches
and development NGOs; by international and Johannesburg-
based environmentalists; and by Soweto and Alexandra
township residents who consume the LHWP water. The first
two critiques will not be considered here, but extensive
documentation is available to the World Commission on
Dams if desired.
The third critique, from consumers, emanated from
Soweto and Alexandra residents who in 1998 forcefully
contradicted President Nelson Mandela's developmental
justification (in a 1995 letter to World Bank President
James Wolfensohn): "We in South Africa need the water
from the LHWP to meet the increase in our demand, and,
in particular, to meet the needs of previously neglected
communities." Instead, insisted community "civic
associations" from impoverished Johannesburg townships,
the LHWP makes water provision to low-income black people
more, not less, difficult. In 1995, approximately 1.5
million residents of Gauteng Province did not have direct
access to water, and to supply them with 50 liters per
person per day would have required only 22 million cubic
meters of additional supply annually, representing a
small fraction of the water that middle- and upper-income
consumers used to water gardens and fill swimming
pools.
The key issue was that a vast proportion of incoming
water (probably more than half in most townships) leaked
out of apartheid-era infrastructure, which black
households were expected to pay for. The possibilities
for conservation were estimated by some credible
officials at 30-40%. But the LHWP water distribution
structure meant that the main catchment-area
intermediary, which should have been in a position to fix
leaks and promote conservation through "demand side
management" had the reverse incentive, namely to charge
municipalities for high-level consumption in order to
make payments on LHWP interest charges. Hence given
limited municipal resources, the expectation was that the
leaks would not be fixed.
As a result, for consumers to pay for the LHWP would
mean raising the real marginal price of water
dramatically. Moreover, while bulk water charges to
municipalities rose by 35% between 1995 and 1998 in large
part due to the LHWP, the levy for the first (lowest)
block of the Johannesburg block tariff increased by
55%, indicating that relatively speaking, first-block
consumers paid a higher proportion of the increase than
did consumers who used more water. At the same time,
pressure intensified on municipal governments to cut off
non-paying consumers, emanating both from central
government and the World Bank.
In October 1995 World Bank water expert (and LHWP
taskmanager) John Roome suggested that a "credible
threat" of cutoff was needed to discipline residents who
continued the municipal payments boycotts begun during
the 1980s, and indeed within eighteen months it
materialised. From January to December 1997 there was
more than a ten-fold increase in water cut-offs in
Gauteng, and a decline from 50% to 20% in the proportion
of those who were cut off that then reconnected. The rate
of water cuts intensified further in 1998, with entire
townships disconnected in some cases, including
individual households who had paid their bills. The LHWP-
related water price increases were to some extent
responsible, although a challenge by three Alexandra
residents to further World Bank loans for Phase 1B until
better conservation and distributional-equity measures
were applied--heard by the World Bank Inspection Panel
in mid-1998--was rejected on grounds of a "very tenuous"
link. (The entire documentation associated with the
Alexandra residents' 1998 challenge is included in an
appendix paper, including a critique of the Panel's
reasoning.)
There remains a hard-core group of technical "experts"
who insist on defending the dam. As recently as 1998,
Bank LHWP taskmanager Roome insisted that the LHWP
"provides an opportunity to advance the debate that not
all big dams are necessarily bad... The argument against
large dams contends that they: are not economically
viable; are not socially acceptable; are environmentally
disastrous; can be a major cause of impoverishment, and
can result in unacceptably high international debt."
Roome argued--against all evidence to the contrary--that
"the economics show that this is lowest cost supply, has
a good Economic Rate of Return and demand management is
being put in place; socially the numbers involved are
low, there has been `good planning' but implementation
key; environmentally the impact is limited and has been
well managed; poverty-wise the project supports poverty
reduction activities and does not squeeze out other
activities; and fiscally SA bears the debt, not Lesotho
and users pay--not tax payers."
The LHWP principle of "users-pay" (i.e., full cost-
recovery) is the giveaway indication that orthodox
(neoliberal) economic logic overrode considerations of
sustainable ecology (at the dam site, downstream in the
Orange River, and in terms of waste by affluent Gauteng
consumers, industry and farmers) and environmental
justice (with respect to low-income Gauteng residents'
access to water and sanitation). Even the economics of
the LHWP have come into question, firstly because Roome
overestimated the demand for Phase 1A water by 40%, and
secondly because the economic argument for distorting
market signals through block tariffs is sound due to the
important "public good" externality effects that are
generated. Ironically, the World Bank's 1994 World
Development Report on infrastructure had set out an
ecological modernisation argument that linked these
discourses: "[The] block tariff links price to volume,
and it is more efficient at reaching the poor than a
general subsidy because it limits subsidised consumption.
Increasing-block tariffs also encourage water
conservation and efficient use by increasing charges at
higher use."
This argument was rejected, ultimately, it appears,
because Bank field staff (Roome and other infrastructure
staff who advised the South African government in 1994-
95) convinced even a minister wedded to eco-social
justice rhetoric (Asmal) that the merits of attracting
private investors into the water sector were so great,
and the fiscally-shrinking state was so incapable of its
own infrastructural investment, as to warrant the full-
fledged commodification and pricing of water. As one
reflection of the uneven balance of power and logic
prevailing, the World Bank declared in March 1999 that
Roome's "power-point presentation to Department of Water
Affairs" in October 1995 was "instrumental in
facilitating a radical revision in South Africa's
approach to bulk water management."
This submission (with appendix) has addressed several
ways in which unequal power relations within the
extremely class/race/gender-divided South African society
have been amplified by the LHWP. Instead of reversing the
inequality, too many government officials appear to be
thriving through exploiting uneven distributional
relations, including extremely well-paid state
bureaucrats in Pretoria and Johannesburg who have for
years made unaccountable decisions about water demand and
supply. The sacrifice of accountability and good
governance to the priorities of the dam building industry
is clear from development policy considerations discussed
here. Thus in 1999, to the disgust of local critics and
embarrassment of the World Bank and South African
government, a court case was heard against the chief
executive officer of the LHWP, Masupha Sole. Prosecutors
with access to Sole's Swiss bank accounts proved that
over a ten-year period he accepted bribes from some of
the largest construction companies in the world,
including ABB of Switzerland, Impregilio of Italy, Anglo
American and Group 5 of South Africa, and several other
major firms.
This latter revelation is only a superficial warning
flag, of course. But the litany of other concerns about
the LHWP--viewed from Lesotho as a whole, from downstream
areas reliant upon the Orange River, and from
Johannesburg--suggest that the WCD must take extremely
seriously lessons of this flawed project when making
recommendations about the costs and benefits of big dams,
and when considering supposedly expert submissions from
World Bank and government officials whose judgments in
at least the case of the LHWP are manifestly open to
debate.
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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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