The Kingdom of Lesotho

Published by Wade Publications CC

Construction

Characterised by large developments such as the Lesotho Highlands Water Project, the construction sector in Lesotho has played a dominant role in stimulating economic growth.


Pipelaying Ha-Nchela © Metolong Authority

Government spending has in recent years focused on building a minimum infrastructure platform to support business development, diversification and investment. In addition, large construction projects have left a profound economic legacy. The first phase of the multimillion-dollar Lesotho Highlands Water Project (LHWP) brought jobs, infrastructure and skills transfer. The second phase of the LHWP, set to begin in 2015, will see the construction of dam and hydropower infrastructure as well as access roads, power transmission lines, water connections and a variety of accommodation facilities.

According to the Central Bank of Lesotho in its latest annual report, the building and construction subsector expanded by an estimated 11.3 percent in 2013 compared with a growth rate of 34.4 percent in 2012. The slowdown was attributed to a deceleration in construction activities following the completion of some major projects in 2012, which included the construction and extension of shopping malls and some Millennium Challenge Account (MCA) related projects. Construction activities in 2013 were focused on Metolong Dam, rural and urban roads, residential property development, and factory shells at the Tikoe industrial site. The 2014 African Economic Outlook anticipates the secondary sector – construction in particular – performing well in 2014 and 2015 in view of ongoing water and sanitation projects, road and other public infrastructure construction, not to mention longer term projects such as the LHWP2, which is scheduled to begin in 2015.

Support for infrastructure development has come from a number of sources. One of the most important of these has been the US Government’s Millennium Challenge Account, through which an amount of US $362.5 million has gone toward the construction of water supply and healthcare infrastructure, among other projects. The European Union (EU) has also driven a variety of infrastructure programmes, including roads and water supply projects, with a further €142 million committed under the National Indicative Programme (2014-2020) of the 11th European Development Fund (EDF).

DEVELOPING THE DOMESTIC INDUSTRY

Part of the World Bank funded Integrated Transport Project (ITP), which runs until 2015, the Local Construction Industry Development Study aimed to help establish a supportive environment in terms of policy and strategy for the development of a sustainable local construction industry and body of built environment professionals. The study recommended the adoption of a National Construction Industry Development Policy, to be supported by a Construction Industry Development Act, Built Environment Professions Act, and recommendations for regulations specific to the procurement of construction works for inclusion in the new Financial Regulations.

It is envisaged that the establishment of two independent bodies will also help to develop the local industry. The mandate of the proposed Lesotho Construction Industry Council (LCIC) will be to set up a reliable contractor registration system and monitor the performance of contractors while promoting best practice and seeking international recognition and accreditation for local engineers, architects, technologists and technicians. The Council for Built Environment Professions (CBEP) will be responsible for the registration, training, accreditation and conduct of key built environment professionals, setting standards for best practice, promoting appropriate standards of education and training, accrediting that training, and helping to design suitable courses for Lesotho’s vocational and tertiary education system.

In order to add value to the domestic construction industry, the National Strategic Development Plan calls for research to be conducted into the development of local materials and for Basotho producers to be trained in entrepreneurial, managerial and competitiveness skills to help raise product quality levels.

The Lesotho National Development Corporation (LNDC) aims to ensure optimum participation of Basotho businesses in the second phase of the Lesotho Highlands Water Project (LHWP) through a series of capacity-building programmes for the local private sector. Just as the construction experience gained in Phase 1 of the LHWP proved to be a stepping stone for Basotho companies to receive contracts for other construction activities, such as building houses, roads and bridges, Phase 2 presents additional opportunities in the value chain.

The LNDC’s January-March 2014 newsletter enumerates the following construction opportunities presented by the LHWP2:

  • Pre-construction activities, such as planning, design and construction of advance infrastructure (roads, works camps), consultancy/feasibility studies and plant hire.
  • Construction activities such as dam construction, property development, minor works (subcontracts), supervision of construction works, and supply of goods (steel, cement and stone).

Construction permits
While Lesotho’s score improved in the World Bank’s 2015 ‘Doing Business’ report as regards the ease of obtaining a construction permit, rising from 163rd in 2014 to 161st out of 189 economies, its ranking is still below the regional average. According to the report, to obtain a permit to build a warehouse in Lesotho requires ten procedures, takes 179 days and costs 13.7 percent of the warehouse value.

In order to improve this scenario, the National Strategic Development Plan (2012/13-2016/17) recommends: setting time limits and service levels, such as enforcing a 30-day time limit to obtain a permit; developing guidelines for applicants and automating the application processes for construction permits; and examining options for establishing a one-stop centre for relevant agencies such as Maseru City Council, Land Survey and Physical Planning and Lesotho Electricity Corporation and Water Authority.

WATER & ENERGY PROJECTS

Government-led construction of water supply, sanitation and energy infrastructure is prioritised, with the goal of connecting more households to basic utilities as well as meeting the needs of local industry. Furthermore, the second phase of the Lesotho Highlands Water Project (LHWP) www.lhwp.org.ls is expected, like its predecessor, to have many positive spin-offs over and above the dams and water transfer schemes themselves in the form of hydropower plants, power lines, roads, bridges, housing, clinics and telecommunications systems.

The EU has adopted an indicative programme for development cooperation with Lesotho, covering the period 2014 to 2020. Of a total amount of €142 million, €78 million will be used for the expansion of water supply and sanitation infrastructure and rain water collection, while €28 million will go towards projects supporting electrification and energy production, conservation and efficiency.

Lesotho Highlands Water Project
The first phase of the Lesotho Highlands Water Project was the biggest water transfer scheme that had ever been undertaken on the African continent. It involved the construction of a system of dams and tunnels to transfer water from Lesotho to South Africa’s Vaal Dam, as well as hydroelectric power stations and other infrastructure such as roads.

Completed in 1998, Phase 1A encompassed construction of the 185-metre-high concrete double curvature Katse Dam (the highest in Africa) on the Malibamatso River and associated infrastructure and transfer tunnels from the Katse Reservoir to the ‘Muela Hydropower Station and on to the Ash River in South Africa. Phase 1B, which was finished in 2004, consisted of the 145-metre-high concrete-faced rockfill Mohale Dam on the Senqunyane River, a tunnel to the Katse Reservoir, and a diversion weir on the Matsoku River.

Phase 2 of the LHWP (LHWP2) consists of both water transfer components and a pump-storage scheme for electricity generation, which together will cost in the region of M17 billion. The agreement governing the LHWP2 was ratified by South Africa in November 2012 and subsequently by Lesotho in May 2013. It was launched in March 2014 by President Zuma and King Letsie III at Tlokoeng in Mokhotlong district, where the Polihali Dam is to be built. South Africa is responsible for funding the water transfer component, while Lesotho will fund the 1 200-megawatt Kobong Pump Storage Scheme.

Water transfer and related infrastructure will comprise:

  • The 165-metre-high concrete-faced, rockfill Polihali Dam
  • A 40-kilometre-long, 5-metre-diameter transfer tunnel connecting Polihali to the existing reservoir at Katse
  • A 60-kilometre west-east access road linking the A8 near Matsoku to the A1 near Tlokoeng
    High tension power and fibre optic telecommunications extensions along the abovementioned access road
  • Ten new bridges, with three being higher than 100 metres and longer than 0.5 kilometres, linked to some 100 kilometres of rural feeder roads
  • Temporary accommodation and associated services for over 2 000 workers

According to the LHDA, implementation is scheduled to commence with the construction of advance infrastructure projects in 2015 and the dam and tunnel in 2017, with the first batch of tenders released in September and October 2014. Delivery of water and hydroelectricity generation is expected in 2023. This will supply the Vaal River System with approximately 1 255 million cubic metres of water per annum – around 465 million cubic metres more than it currently receives from LHWP1.

Technology transfer and capacity building are vital components of the project, and there will be a variety of job opportunities for Basotho. It is envisaged that employment will reach a peak of between 2 500 and 3 000 in the 2018 to 2020 period. Other benefits include accelerated cash inflow from royalties as well as increased power generation for industry and mining.

Lowlands Water Supply Project
The Lowlands Water Supply Project (LWSP) aims to ensure a reliable water supply for the lowlands, providing clean and safe drinking water as well as supporting the country’s industrial sector, particularly its textile factories. The Metolong Dam and Water Supply Programme (MDWSP) lies at the heart of the project. It comprises the construction of the Metolong Dam on the South Phuthiatsana River about 35 kilometres from Maseru, as well as access infrastructure, urban water reticulation and wastewater systems to supply additional water for domestic and industrial needs in the lowlands, covering some 250 villages.

In its final form, Metolong Dam will be 83 metres high with a crest width of 270 metres and a reservoir of 63.7 million cubic metres. The water treatment works will have a capacity of 75 000 cubic metres per day on average (peaking at 93 400 cubic metres). The downstream conveyance system comprises transmission pipelines, storage reservoirs and associated pumping stations. Pipelines include a 34.3-kilometre line to Maseru; 33.0-kilometre line to Roma and Mazenod; 30.5-kilometre line to Morija; and a 25.0-kilometre line to Teyateyaneng.

Phase I of the Water and Sanitation Services (WATSAN) component of the programme has been implemented in the villages of Ha-Seeiso, Hlakoaneng Ha-Seeiso, Ha Ramakabatana, Takalatsa and Ha Sekantši. Phase II, which was 95 percent complete by the end of the 2013/14 financial year, aims to supply such services to the remaining 35 villages in the catchment area.

The first of the roller compacted concrete was placed into the dam’s foundation in August 2013 by the main contractor, Sinohydro Corporation Limited, and three-quarters of the work on the dam as well as the raw water pumping station had been completed by February 2014. At the same time, 95 percent of the water treatment works were finished and 50 percent of downstream conveyance systems had been finalised.

The first supply of drinking water from the MDWSP, initially scheduled for September 2014, has been postponed until the end of the year because of problems with the lift-pump as well as delayed transportation of plant equipment from South Africa. Delivery of potable water to Mazenod, Roma, Morija and Teyateyaneng should take place before the end of 2014, while Maseru expects to receive treated water by April 2015.

Urban water and sewerage
Lesotho’s Water and Sewerage Company (WASCO), overseen by the Lesotho Electricity and Water Authority (LEWA), is in charge of construction projects related to domestic and commercial water supply and sewerage systems in urban centres. During 2013/14 some 6 000 urban households were connected to potable water and 600 new sewer line connections were made. The current programme aims to connect a further 6 070 households to treated water and make 200 sewer line connections.

The Urban and Peri-Urban Water Supply Project forms part of a five-year programme of strategic investments in the water sector, supported by the United States through the MCA Lesotho. The project has involved the rehabilitation, upgrading and extension of existing water supply networks as well as construction of new works in the major towns of nine of the ten districts of Lesotho, comprising: water treatment works, reservoirs, bulk pipelines, distribution pipelines and house connections. The five project packages cover Maseru and Mazenod, Semonkong, Mafeteng, Mohale’s Hoek, Quthing and Qacha’s Nek, Mokhotlong, Botha-Bothe and Leribe, and Mapoteng.

Drawing on EU funding, the Maseru Wastewater Project is helping to improve the treatment and disposal of wastewater for around 100 000 residents in the urban and peri-urban areas of Maseru through connections to sewer networks as well building low-cost on-site sanitation services. The latest phase of the project, the two-year On-Site Sanitation Facilities Programme, began in May 2014. It will provide environmentally friendly precast Amalooloo Dry Sanitation System toilets to 3 100 households.

Rural water supply and sanitation projects
MCA Lesotho has also been involved in the construction of up to 250 rural water supply systems and around 30 000 Ventilated Improved Pit (VIP) latrines. During 2013/14, 97 water supply systems were constructed and 500 hand pumps maintained, serving 60 738 people. At the same time 58 000 rural dwellers benefited from the construction of 8 000 VIP latrines. Plans for the 2014/15 financial year encompass the construction of 90 water supply systems and a further 8 000 VIPs.

The Lowlands Rural Water Supply and Sanitation Project aims to provide basic rural water and sanitation infrastructure as well as environmental health support to the districts of Berea and Maseru. Being undertaken in parallel with the Metolong Dam Water Supply Project, it focuses on communities located in the vicinity of the project’s primary and secondary water supply pipelines, and is expected to benefit some 65 000 inhabitants. Funded by the World Bank and African Development Bank, the project is scheduled for completion by the end of 2015.

Electrification and power generation projects
The present goal of Government’s electrification programme is to connect 16 000 households and institutions to the electricity grid nationwide. This includes rural electrification covering the districts of Botha-Bothe and Leribe. In addition, the construction of 8 kilometres of solar street lighting is being undertaken in Mapholaneng, Peka and Mapoteng. Some M80.0 million is allocated for the implementation of these projects in the 2014/15 budget.

A further rural electrification project aims to improve the standard of living for communities affected by construction of the Metolong Dam and associated developments. This will see electrification provided for over 70 villages, including some schools and clinics, in the Metolong catchment area.

As regards hyrdopower generation, the existing 72-megawatt ‘Muela hydropower station was built under the first phase of the LHWP, and the second phase will see the hydropower generation capacity of the scheme increased. The proposed 1 200-megawatt Kobong Pump Storage Scheme will augment Lesotho’s electricity generation capacity, for domestic use and for export to neighbouring South Africa, and would comprise the existing Katse Reservoir as the lower reservoir and a new upper reservoir in the Kobong valley. Its implementation is subject to the outcome of a joint feasibility study. This is discussed in further detail in the ‘Water & Energy’ chapter.

Studies have also been undertaken for the development of another pump storage scheme at Monont’sa in northern Lesotho, with the project having been declared technically feasible and of long-term benefit to the region. The scheme consists primarily of an upper dam, lower dam, large machine hall cavern housing four multi-stage reversible pump-turbines, a transformer hall cavern, waterway tunnels and associated access tunnels.

Wind energy is also being explored, with PowerNET Developments (Pty) Ltd having applied for permission to erect 42 wind turbines in north-eastern Lesotho in order to harness the wind power found in the Maloti Mountains for use by both Lesotho and South Africa. The project has been given the go-ahead following an Environmental Impact Assessment and a commitment by the developer to employ mitigation measures to protect the vulnerable populations of Cape vulture which inhabit the site. Lesotho’s Department of Environment has issued the environmental clearance for an initial period of one year in order to assess the bird mortality risks, and reserves the right to revoke the authorisation if there are environmental concerns caused by the project that are beyond mitigation.

Furthermore, a feasibility study for wind energy development is being undertaken in Semonkong by Mos-Sun Clean Energy Technologies (MOSCET) www.moscet.co.ls, in partnership with the LNDC. Funds have been sourced from the Energy and Environment Partnership for Southern and East Africa (EEP S&EA).

TRANSPORT INFRASTRUCTURE

The role of transport infrastructure in improving a country’s competitiveness cannot be overemphasised. In recent years, Lesotho’s central and local governments have made considerable investments in improving the quality of roads to bitumen or hard gravel standards and expanding the network of urban and rural roads. The introduction of the Lesotho Road Management System (LRMS), which enables the collection and systematic monitoring of data on national roads, will facilitate timely maintenance interventions before roads start to deteriorate.

During 2013/14, various national road construction projects continued throughout Lesotho, covering approximately 255 kilometres. These included the Roma-Ramabanta-Semonkong-Sekake, Mokhotlong-Sani Pass and Oxbow-Mapholaneng roads, most of which were scheduled for completion during 2014/15. The 40-kilometre Mantšonyane-Lesobeng road was completed in July 2013. At the Local Government level, 58 kilometres of urban roads were built in Mokhotlong, Botha-Bothe and Maseru, as well as a total of 850 kilometres of rural community roads across the country.

In the 2014/15 financial year, the Ministry of Public Works and Transport is focusing on ongoing construction of main trunk roads and bridges, as well as proposed new projects to complement existing investments, while the Ministry of Local Government concentrates on urban and rural roads as well as footbridges. The budget allocation amounts to M811 million for road construction and M97 million for building footbridges.

Furthermore, construction of infrastructure under the World Bank’s Integrated Transport Project (ITP) continues, following the extension of the project until mid-2015. The focus in this regard has been on constructing and upgrading domestic roads, as well as securing cross-border road links with neighbouring South Africa.

In the past several years, a series of infrastructure development initiatives have also been undertaken at Moshoeshoe I International Airport with a view to developing a cargo hub at the airport. There are presently moves afoot to revive the air cargo facility project as well as to extend and rehabilitate the runway at MIA. An additional M40 million was set aside in the 2014/15 national budget for the rehabilitation of the airport’s runway as well as work on the Maseru Container Terminal.

MGC Construction has made a notable contribution to infrastructural development, having undertaken many successful projects. This includes upgrades of intra and inter-district and municipal roads.

HOUSING & PROPERTY

According to the Centre for Affordable Housing Finance in Africa, a significant proportion of housing is owner-constructed and owner-financed, with around 23 percent of households living in dwellings they have built themselves and 19.7 percent having inherited their home. In towns and villages, and to some extent also in rural areas, owners typically collect materials over time and eventually build their own homes.

While the formal real estate market is relatively underdeveloped, in recent times increasing demand from the expatriate, higher-income community has seen the emergence of a few high density real estate developments. Housing solutions for the lower end of the property market are also in great demand, especially given Lesotho’s rapid urbanisation.

The National Strategic Development Plan for Lesotho recognises the importance of shelter and property development.  Aims here are to strengthen land administration and physical planning, facilitate the provision of basic infrastructure to improve quality of shelter, improve the quality and safety standards of housing, encourage the local production of construction outputs, promote densification and regularise property markets, develop housing finance and land markets, and identify appropriate housing solutions, particularly for low income households.

Important legislative developments in the sector include the Land Administration Act and the Land Act (both of 2010), the Land Regulations and Land Court Regulations of 2011 and the Draft Sectional Titles Bill of 2011. However, access to land remains a major obstacle.

State housing developers
A state-owned developer, the Lesotho Housing and Land Development Corporation (LHLDC) was established following the merger of the Lower Income Housing Company and Lesotho Housing Corporation in 1988. The mission of the LHLDC is to assist in meeting the shelter needs of all Basotho by providing a variety of housing sites as well as home ownership and rental accommodation options to cater for a wide spectrum of income levels in the most cost effective manner available.

The corporation finances and engages construction companies to build and maintain the housing stock as well as having an in-house capacity for construction. Most construction occurs in the capital, Maseru, where ‘malaene’ – rows of single or double interconnecting rooms – are commonly built for rental purposes. 

Habitat for Humanity (Lesotho) provides shelter for low-income families and vulnerable groups by building simple and affordable homes in addition to raising awareness about legal issues surrounding housing, property ownership and inheritance rights. Government also undertakes limited housing development and issues tenders for the construction of residential buildings.

Commercial and residential property
An important developer in the higher-income market is the Matekane Group of Companies, with Matekane Property having initially managed the real estate needs of the company’s various subsidiaries before diversifying into commercial and residential property development. Since 2009, MGC Properties has developed for itself an enviable position within the property market with the erection of world-class structures such as its headquarters, MGC Park and Mpilo Estates. The completion of Mpilo Boutique Hotel will introduce a new spectrum of clientele.

Building for trade and industry
Initiatives to create a Minimum Infrastructure Platform (MIP) to improve economic growth and export competitiveness have resulted in the construction of new border posts and other facilities to streamline customs procedures. A new Lesotho Revenue Authority (LRA) office complex has been built at Caledonspoort Border Post and the border post facilities refurbished at a cost of around M36 million. Similar refurbishment has been carried out at the Maseru, Maputsoe and Tele border posts.

The Lesotho National Development Corporation (LNDC) constructs factory shells and provides services (roads, water and electricity) as an incentive to investors. At the 80-hectare Tikoe Estate, the construction of additional infrastructure including water, electricity, roads and 30 000 square metres of factory space, as well as six smaller factory shell units of 500 square metres each, began during 2012, with work on 11 large factory shells continuing into 2014.

Social infrastructure
The MCA’s Health Sector Programme, which was winding up during 2014, has provided for the construction of: 

  • 138 health centres (rehabilitated and expanded)
  • 14 hospitals’ outpatient departments (expanded)
  • A new laboratory
  • A new blood transfusion service centre
  • New residences for 120 students and six tutors

An increasing number of public sector projects are undertaken with input from the private sector. Local contractors are used where feasible in an effort to boost citizen economic empowerment.

Replacing the Queen Elizabeth II (QEII) referral hospital, the Queen ‘Mamohato Memorial Hospital was built in Maseru at a cost of around M1 billion in a Public-Private Partnership (PPP) agreement between Netcare and the Lesotho Government. Accommodating 425 patients and 700 employees, this ultra-modern hospital has advanced labour wards, an ICU, nursery, theatres, electronic filing systems, cameras, power supply and more. Studies are also underway to design a replacement district hospital for QEII.

The education sector has also experienced an ongoing programme of construction activity. During 2013/14, 58 classrooms and 150 latrines were built for primary schools, while at the secondary level, 79 classrooms, 9 science laboratories, 16 teacher houses and one multi-purpose hall were built.

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