THE government has engaged South Africa in a bid to reverse the garnishing of royalties due to Lesotho for the sale of water to South Africa in terms of the binational Lesotho Highlands Water Project (LHWP) agreement for the transfer of water to South Africa.
The garnished money will be used to pay a German company, Frazer Solar, who were awarded £50 million (M856 million) damages by a South African arbitrator for the Lesotho government’s alleged breach of a 2018 M1, 7 billion solar energy deal.
The deal was aimed at providing Lesotho with 40 000 solar water heating systems, 20 megawatts of solar power capacity, 1 million LED lights and 350 000 solar lanterns over four years.
The royalties were garnished late last month by the Gauteng High Court. This after Frazer Solar had argued that the Lesotho government had repeatedly failed to honour a January 2020 default judgement by a South African arbitrator to pay damages for the alleged breach of the 2018 deal.
Early this week, the government dispatched an inter-ministerial delegation for talks with South Africa on the issue.
The delegation comprised of ministers ‘Matšepo Ramakoae (Foreign Affairs and International Relations), Mohapi Mohapinyane (Energy and Meteorology) and Nkaku Kabi (Water Affairs).
Ms Ramakoae yesterday refused to give details on the outcome of their trip, saying they were yet to brief Prime Minister Moeketsi Majoro as they had only returned to the country on Tuesday night.
“We will only brief the prime minister this evening (yesterday),” Ms Ramakoae said.
“For now, I can only say that we held warm discussions but our counterparts are also yet to report to their authorities. Our role was to engage South Africa on a government to government level and make them aware of the implications (of the garnishing of royalties) on our bilateral relations.
“It is also worth noting that no property has been attached as yet and no monetary transactions have been stalled. The talks are ongoing but since we have also engaged some legal experts, I can’t go into the merits of the case,” Ms Ramakoae said.
The minister’s claims that no assets have been seized are despite that Gauteng High Court Deputy Sheriff Khensani Ngobeni was ordered by the court to garnish Lesotho’s water royalties early last month.
Frazer Solar also seized Lesotho’s shares in a Mauritian company, West Indian Ocean Cable Company (WIOCC). Lesotho’s dividends from WIOCC and the water royalties will be used to pay part of the £50 million damages the government owes Frazer Solar.
Prior to the ministers’ Sunday trip, Ms Ramakoae had written to the South Africa High Commission, expressing “great surprise and dismay that the Trans -Caledon Tunnel Authority (TCTA) has been served with a writ of execution (garnish order) in the High Court of South Africa”.
The TCTA is South Africa’s implementing arm of the LHWP in terms of the treaty which was signed between the two countries in 1986.
“The effect of such a writ is to stop the processing of Lesotho’s monthly royalties’ payments for the Lesotho Highlands Water Project (LHWP). Such royalties accrue as a result of the implementation of the provisions of the Treaty between the Governments of the Kingdom of Lesotho and the Republic of South Africa on 24 October 1986.
“Legally, the Agreement is between the two parties and the TCTA is only the facilitator and third party in the transfer of the royalties…
“In terms of Article 6 (8) of the Treaty, the interruption of the flow of water to the Government of South Africa or the non-payment of the royalties rightly due to the Government of Lesotho is a very serious breach of the Treaty by either party,” Ms Ramakoae further said in her 4 June 2021 letter.