Lesotho Highlands Water Project halted: Contractor's pollution crisis exposes governance failures, soaring costs

Key topics:Pollution from contractor halts LHWP2, contaminates drinking water.Project costs skyrocket from R8 billion to R53 billion.Lack of oversight raises alarm over national water security..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Kerry Lanaghan.The Lesotho Highlands Water Project Phase II (LHWP2), a crucial transboundary infrastructure initiative designed to secure water supply for Gauteng and surrounding provinces, has once again ground to a halt - this time due to a contractor polluting the Katse Dam and nearby rivers with acidic wastewater. The resulting environmental crisis has contaminated vital drinking water sources and prompted an urgent halt in construction, highlighting governance failures and escalating costs that now threaten the project's viability.Environmental breach exposes oversight failuresIt is alleged that the contractor polluted nearby rivers and the Katse Dam with acidic wastewater, contaminating vital drinking water sources. This breach of environmental regulations has forced an immediate cessation of works to prevent further damage and ensure accountability.“How did pollution from the contractor go unnoticed until now?” According to Julius Kleynhans from the Organisation Undoing Tax Abuse (OUTA): “This is a critical governance failure. The fact that such extensive pollution could go undetected until it affected drinking water supplies indicates a lack of proper environmental oversight and monitoring. It also raises questions about the role and effectiveness of the implementing agency and the Department of Water and Sanitation in enforcing environmental compliance on the project.”The Katse Dam is a linchpin in the region’s water infrastructure, supplying water to Gauteng, the Free State, North West, and parts of Mpumalanga. If contamination continues or is left unmitigated, it could compromise drinking water quality, increase treatment costs, and worsen existing water supply challenges.From R8 Billion to R53 Billion: A financial quagmireThe financial trajectory of LHWP2 is just as troubling as the environmental breach. The initial project budget was set at R8 billion in 2008, which adjusts to around R19 billion today. However, due to persistent contractor delays, mismanagement, and poor oversight, costs have ballooned to R53 billion.“Don’t forget Nomvula Mokonyane’s role in this in her tenure as Minister of Water,” Kleynhans pointed out. “The Auditor-General has confirmed that R11 billion was added to the project cost in just one year - a clear indicator of inefficiency, weak financial control, the lack of accountability and political interference.”The Democratic Alliance (DA) has echoed these concerns in a press release on 15 May 2025, calling for urgent intervention and oversight.Accountability lacking, oversight demandedAccording to Kleynhans, “there has been no indication that any party has been held accountable. This lack of consequence underscores the urgent need for Minister Pemmy Majodina to empower the Auditor-General of South Africa (AGSA) to investigate the matter and potentially for the Green Scorpions and SIU to get involved should it fall within South African jurisdiction.”The DA has also called on Minister Majodina to act. “On 7 May, the DA formally wrote to Minister Majodina requesting that she urgently empower the AGSA to oversee and investigate these escalating costs and environmental issues. No substantive response has followed,” said Stephen Moore MP, DA Deputy Spokesperson on Water & Sanitation.Given the cross-border nature of LHWP2, which is situated in Lesotho, current legislation restricts AGSA's jurisdiction. However, the DA argues that the project will remain beyond effective accountability without a clear policy shift.A threat to national water securityThe pollution threatens the integrity of the Katse Dam and surrounding rivers, which are key components of the water supply system for several provinces. “This endangers long-term affordability and sustainability of water for millions of South Africans and our economy,” Kleynhans warned.Municipalities owe over R28 billion to water boards and are struggling to keep up with rising demand for water services. Further delays or environmental setbacks to LHWP2 could exacerbate existing water crises and make it harder for local governments to ensure a clean, affordable supply.Time for action“Without independent oversight and decisive action, the cycle of mismanagement and environmental harm will continue unchecked, and the Lesotho Highlands Water Phase II Scheme is a great example of this, one of which Gauteng water demands will soon bear the brunt for,” said Kleynhans.Both OUTA and the DA are calling for strong, immediate corrective measures. Environmental integrity, financial discipline, and transparent governance are non-negotiable if South Africa hopes to safeguard its water future.“South Africa can’t afford more delays or pollution scandals. Water is not just a service - it’s a national security issue. The longer we ignore this crisis, the more we endanger our economy and our people,” Kleynhans concluded.

Lesotho Highlands Water Project halted: Contractor's pollution crisis exposes governance failures, soaring costs

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