The Treaty

The foreign ministers of Lesotho (Colonel Thaabe Letsie) andĀ South Africa (Mr Pik Botha) signed the Treaty, a contractual agreement governing the design, construction, operation, and maintenance of the Project, as well as the export of water to South Africa, on 24 October 1986, in Maseru, Lesotho.

The Treaty is unique in that it was designed to allow for the disparity in economic development of the countries involved. It was also essential to word the document in such a way that the specific concerns and interests of both countries were all accommodated – no easy task. Finer points dealt with included the volume of water to be delivered to South Africa, as well as a basis for sharing the benefits and a formula for calculating the royalties to be paid to Lesotho.

Importantly, the Treaty also defined the responsibilities of each county as concerns payment for the Project. South Africa was to pay for everything relating to the transfer of the water, including the implementation, operation and maintenance costs of all facilities involved, as well as compensation for the displacement of individuals and communities. Lesotho would finance the hydroelectric power component of the Project.

Over time, six protocols, three of which were envisaged in the Treaty, were added.

  • Contains the royalty manual (in 3 volumes!), setting out the details of how the royalties due to Lesotho should be calculated.

  • Deals with the effect of the project on the SACU revenue due to Lesotho.

  • Cost apportionment between Lesotho and South Africa is set out in this protocol.

  • States supplementary arrangements. These include cost related payments, concessionary finance, insurance and the point at which royalty payment to Lesotho would start. (It was agreed that this would start when the water level in Katse Dam reached 1993m above sea level -which happened in September 1996. )

  • After lengthy negotiations, the parties agreed on how taxation in Lesotho would apply to the project.

  • During the course of the project’s implementation, certain changes to its governance became essential. This protocol changed the name of the Joint Permanent Technical Commission to the Lesotho Highlands Water Commission (LHWC), endorsed its responsibility for the success of the project and recognised the changed role of TCTA beyond the auspices of the LHWP.

Know The Facts

Two teams (one from SA and oneĀ  from Lesotho) drafted text. They comprised of legal experts, senior government officials, specialist consultants and engineers. The final product was a handbook for the implementation of the largest bi-national construction project on the African continent.Since 1986 the treaty has not required any major adjustments, nor has it been necessary to make use of the dispute arbitration mechanism as set out in the document.