Promoting Equitable Access to Opportunities - LHDA's Approach to Local Participation.

Infrastructure projects are often regarded as major contributors to gross domestic product (GDP) growth. The Lesotho Highlands Water Project (LHWP), like other multi-billion infrastructure projects, is seen as one of the key drivers of economic growth in Lesotho and the region. The 1986 Treaty and the Phase II Agreement signed by the governments of Lesotho and South Africa include specific articles that compel the LHDA to ensure that the implementation of the Project benefits the people of both countries.

The Phase II Agreement prioritizes participation of emerging companies in the Project to stimulate business growth, job creation and skills transfer opportunities.

To align with the Phase II Agreement, the LHDA developed policies which include preferential procurement; a deliberate strategy to maximize opportunities and benefits for emerging firms including those within the Project area. The preference criteria include; requirement for local business ownership, employment of women, youth, people with disabilities, and enterprise and skills development requirements.

“To ensure that Phase II promotes socio economic growth in the region as required by the two governments, all contracts have specified minimum participation levels by Lesotho and South African enterprises. During evaluation of tenders, preference points are awarded to encourage higher local participation. LHDA closely monitors performance of each contract towards compliance of these preference goals, to ensure that Lesotho and South African consultants and contractors share the monetary value of Phase II advance infrastructure works as stipulated by the Phase II Agreement,” Gerard Mokone, the LHDA Polihali Operations Branch Manager confirms.

Phase II construction contracts have been structured to encourage sub-contracting to smaller local contractors under a lead contractor. Stellati Construction engaged by the WBHO/LSP JV during the construction of the Polihali Village civil works is an example of a small company engaged through sub- contracting. “We did roadside works which include concreting, paving and storm water drainage on the civil works contract. We have become more resilient from working in the harsh conditions and the expectation to ensure consistent work quality, despite the challenges. Working on the Project was an opportunity to expand our capabilities, and we are confident that we have the competitive edge to participate in larger projects in the future.” Stellati Managing Director Mokitimi Moonyane, stated.

The Project is creating business opportunities and increasing overall purchasing power in the communities, which has led to growing demand for goods and services in the Project area. To maximise the economic benefits, encourage inclusion and promote business transformation, the Mokhotlong Business Community under the leadership of the District Administrator; Serame Linake, established a business forum at the start of the advance infrastructure construction activities. "This resulted in improved visibility for small businesses, and strengthened relations between contractor and sub-contractor prospects." Kepa Keqe, a representative of the forum, confirmed.

While there are business opportunities for local companies and preference strategies in place, winning contracts requires effort and diligence to identify gaps, seek information, and put one’s best foot forward when bidding. In a case where one is successful, the onus is on their company to deliver excellent quality of goods and services consistently. This is the advice of Moeketsi Matete; External Sales Administrator at Ntjamokoatle ?Trading, ?a ?firm ?that ?has ?provided furniture and hardware materials to several Phase II contractors. This includes Rumdel/AC JV which is constructing the Polihali Western Access Road East (PWAR-East).

The Phase II Agreement stipulates that the procurement processes should foster competitiveness,???transparency,?cost effectiveness and quality. Ralits’ere Motaung; Managing Director at Trans-mountain Sand and Blocks based in Mapholaneng, confirms that his company was not engaged only because it is locally owned. “We had to market our product, provide evidence that we are reliable and would deliver the required quantities and quality within the specified timeframes. We were awarded work based on merit.” Motaung advises the business community in the Project area to work together and carefully manage internal strife within the business forum to ensure sustainability.

The minimum participation requirements are varied across Phase II contracts to suit the particular scope of work and local capacity for delivering such. Some infrastructure construction contracts are suited to substantial Lesotho participation i.e. feeder roads, ancillary public buildings, resettlement housing and the infrastructure building contracts.

Phase II is not only creating enterprise development opportunities for sub-contractors but also strengthens linkages between the rural and the urban economies.

Construction activities are set to accelerate in 2023, following the award of the construction contracts of the Polihali Dam, the Polihali Transfer Tunnel and the Senqu Bridge contracts in 2022. It is expected that business and employment opportunities will increase and revitalize the economy of the areas where Phase II is being implemented. However, with the alarmingly high unemployment rate in Lesotho, the LHWP’s contribution to stimulating economic growth, while positive, remains limited.