Business Day (Johannesburg)

South Africa: Constructors Eye Lesotho Project

Andrew Maggs

8 September 2008


opinion

Johannesburg — A PROJECT to construct a new roller-compacted concrete dam in Lesotho is set to improve water supply for industrial and domestic needs as well as make a significant contribution to enhancing urban and rural livelihoods in the mountain kingdom.

Moreover, the project will provide a raft of bidding opportunities for South African contractors and consultants, who will likely see the project as a low-risk opportunity to bolster their order books.

Lesotho's close proximity, and the experience that most of SA's major construction groups have in working in the country, will no doubt generate keen interest among contractors once the procurement process for dam construction works commences this year.

Being implemented within the framework of the Metolong Dam and Water Supply Programme, the initiative comprises five main projects:

Construction of the Metolong Dam, including a multistage raw water intake and pump station;

Construction of water treatment works;

Construction of a downstream conveyance system comprising transmission pipelines, reservoirs and other ancillary facilities to convey treated water to the towns of Maseru, Mazenod, Morija, Roma, and Teyateyaneng;

Installation of advanced infrastructure, including access roads, power supply, water and sanitation systems, telecommunications, and a camp to support construction works; and

Implementation of an environmental and social management programme which will cover the management and development of cultural resources, land acquisition and resettlement, catchments management, and an HIV/AIDS awareness programme.

Already expressions of interest have been invited from consulting firms for engineering services (detailed design, preparation of tender documents and construction supervision) for the Metolong dam project.

Funding for the programme has been secured from various sources, with the MCC (Millennium Challenge Corporation) making the largest contribution to it.

Within the framework of its $322,5m compact (foreign assistance agreement with Lesotho), the MCC has provided $86,8m to meet the costs of a programme management consultant, the water treatment works design-build contractor, and the downstream transmission system construction contractor.

Additional funding will come from a consortium of Arab donors comprising the Kuwait Fund for Arab Economic Development, the Opec Fund for International Development, the Arab Bank for Economic Development in Africa, and the Saudi Fund for Development. Pooled funds from these institutions amounts to the equivalent of about $39m.

The World Bank is providing $20m towards the cost of environmental and social impact assessments, as well as the construction of the conveyancing system to Teyateyaneng.

The government of Lesotho will provide $32,8m for the Metolong Authority implementation organisation and advanced infrastructure among other activities.

Andrew Maggs consults to the construction industry, providing business intelligence, research and assisting in strategy compilation.

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