Challenge damns Lesotho water project
Basotho companies claim they are being prejudiced and want the high court to intervene
The critically important Polihali Dam in Lesotho could be delayed by a consortium of Lesotho contractors, who claim Basotho contractors have been unfairly prejudiced and have petitioned the Lesotho High Court to halt the awarding of construction contracts worth more than a billion rands.
In an urgent application, the Consortium of Lesotho Contractors has approached the commercial division of the court, saying the criteria used in adjudicating the contracts were skewed in favour of South African companies. The consortium argues that, in terms of the current criteria, no Lesotho-based company would be eligible to tender, and this breaches a bilateral treaty between Lesotho and South Africa.
Polihali will play a vital role in meeting the growing water needs of Gauteng by increasing the current supply of 780-million cubic metres to 1 255-million cubic metres a year.
The consortium brings together 30 Basotho-owned construction companies, including Lesotho Consolidated Civil Constructors, Sigma Construction, Matekane Transport and Plant Hire and Moradi Crushers.
Among the South African companies who have put in bids are the WBHO/LSP Joint Venture, the RES Joint Venture, the EXR/TIM Plant Hire-KR Holdings Joint Venture and the CMC/CMI/LENS ACI Joint Venture.
The contracts are being awarded by the implementing bodies of the Lesotho Highlands Water Project (LHWP), the Lesotho Highlands Development Authority and Lesotho Highlands Water Commission.
Phase one of the project was completed in 2003. Phase two, valued at 26-billion maloti (R24-billion), was initially scheduled for completion by 2020. But, after repeated delays since it was launched in March 2014, the completion date has been extended to 2025.
The appointment of service providers for the design contracts of the Polihali Dam and tunnel began in 2016, following the finalisation of an amended procurement policy adopted by the two countries in May of the same year. The court action could cause a further delay.
The consortium argues that the development authority and the commission must be ordered to formulate new procurement guidelines in line with a bilateral treaty and agreements initiated in 1986. Both have filed a notice of motion opposing the application.
Other respondents are Lesotho’s water minister, Samonyane Ntsekele, the country’s attorney general, Haae Phoofolo, and several South African companies.
The parties are due to appear before the commercial court’s Judge Lisebo Chaka-Makhooane on April 19 to set a date for the hearing.
In its application, the consortium asks the court to interdict the procurement processes for the construction of the Polihali northeast access road, the contract for the construction of advance infrastructure civil works at both the Polihali and Katse dams and the contract for the construction of the Polihali diversion tunnels.
It asks the court to declare the evaluation criteria of three tenders in violation of the LHWP Project Phase II Agreement, a bilateral treaty between Lesotho and South Africa, and to order the authority to reformulate the criteria and readvertise the tenders.
The chairperson of the consortium, Mokhele Likate, says in an affidavit that the authority and commission are bound by article 10 of the bilateral treaty to share all infrastructure works between contractors registered in Lesotho and in South Africa “on an equal monetary basis, taking into account … their shareholding and operational experience”.
He accuses the authority and commission of “overlooking their corollary duty of capacitating local companies” and of undermining the construction grading standards set by the Lesotho government.
In an interview, Likate said the authority had developed a “categorisation table”, which ranked companies’ capacity according to their turnover and construction experience.
But, he said, the table, which is similar to one used in South Africa, did not match the Lesotho government system, in that the highest-ranked local companies would feature low on the authority’s table.
“This measure is … clearly prohibitive for Basotho nationals and Lesotho companies … and therefore renders the applicant ineligible to qualify to tender for the project(s), in stark violation of the bilateral treaty,” Likate said.
The water transfer component of the Polihali project comprises a 165m concrete-faced rockfill dam downstream of the confluence of the Khubelu and Senqu (Orange) rivers and a 38km concrete-lined gravity tunnel connecting the Polihali and Katse reservoirs.
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“This measure is … clearly prohibitive for Basotho nationals and renders the applicant ineligible to qualify to tender for the project(s) in violation of the treaty”