Mountain kingdom rates high in governance


March 17, 2004

Johannesburg: Lesotho yesterday officially opened Africa’s largest dam and water project – a stunning $8 billion (R53.2 billion) scheme that has involved the impoverished kingdom in fighting and winning unprecedented battles against corporate graft.

Lesotho has taken on global construction firms and local officials, turning the Lesotho Highlands Water Project into both an example of modern development engineering and spotless governance, analysts say.

“Lesotho has shown that where there is political will, there is a way,” says Daryl Balia, head of the South African chapter of Transparency International, the Berlin-based anti-corruption watchdog.

“Lesotho serves as a noble inspiration and we want this experience to be transposed to the rest of Africa.”

The project, inaugurated in 1986, aims to redirect Lesotho’s abundant water resources to Gauteng through one of the world’s largest networks of dams.

With hundreds of millions of dollars up in contracts, the project became a magnet for major construction firms – not all of which played by the book.

Prosecutors took notice, and through perseverance secured guilty pleas and convictions against the former head of the Lesotho Water Highlands Authority as well as two international firms.

South African-based lawyer Guido Penzhorn, who is serving as the lead prosecutor in Lesotho’s anti-corruption drive, says he is now considering whether to bring charges against Italy’s Impregilo, which was implicated by a South African consultant who last year pleaded guilty to receiving a bribe which he passed on to an official.

Officials at Italy’s biggest listed construction group have denied any wrongdoing.

A spokesperson for the group in Milan said the firm was unaware of any legal proceedings.

“At the moment, we do not know of any proceedings,” the spokesperson said.

“But the Impregilo that was involved in this is very different from the company today.

“The management team that was involved in this has long left the group.”

The water project will be an important boost for Lesotho, one of the world’s poorest nations.

President Thabo Mbeki and Prime Minister Pakalitha Mosisili of Lesotho yesterday opened the 144m high Mohale Dam, part of the first phase of the water project.

By the time of completion of the full project around 2020, the mountain kingdom will be self-sufficient in electricity and earn a good chunk of foreign exchange from water sales.

The pace of construction on the dam project has been matched by the pace of prosecutions for graft.

Last August, Lesotho’s high court fined German engineering firm Lahmeyer International R10.65 million for bribery.

The high court found Lahmeyer guilty on seven counts of paying bribes to Masupha Sole, the former chief of the Lesotho Water Highlands Authority, who was convicted in 2002 of corruption and sentenced to 15 years in prison.

Lahmeyer’s appeal is due to be heard next Monday.

That same month, a fine against Canadian firm Acres International was reduced to R15 million from R22 million after the court of appeal acquitted it on a second count of bribery.

Lesotho officials say a dozen local and international companies, including firms from Britain, France, Germany, Italy, Panama and Sweden, have been charged with paying a total of R12 million in bribes over a 10-year period to government employees and other project employees.

Corporate analysts say Lesotho’s drive to root out corruption in the dam project is all the more remarkable for a country which, with only 2 million people is among the least developed in the world.

“Lesotho has set the example for the region,” says Elsa Yaffe, a researcher with South Africa’s Executive Research Associates.

Categories: Africa, Lesotho, Odious Debts

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