Lesotho dam project misses deadline to pay multi-million compensation claim

Dozens of communities downstream of the Katse Dam are owed compensation since 2013 by the Lesotho Highlands Water Project. Photo: Sechaba Mokhethi.

• The Lesotho Highlands Water Project has missed a Court of Appeal-set deadline to pay compensation claims to communities affected by the Katse Dam.
• 21 community associations affected by Phase I of the Lesotho Highlands Water Project have lodged fresh compensation demands following the landmark appeal ruling in November.
• The LHDA says the final figure owed to Ukhopo-Maliba-Matšo Society is still under negotiation.

The Lesotho Highlands Development Authority (LHDA) is facing potentially significant financial exposure. After losing a landmark case in the Court of Appeal, dozens more community associations have come forward to demand compensation unpaid for decades.

Advocate Rapapa Sepiriti, who represented the Ukhopo-Maliba-Matšo Society that won the appeal, said there are 22 associations representing villages downstream of Katse Dam that were affected by Phase I of the Lesotho Highlands Water Project (LHWP).

Sepiriti said the associations were given initial compensation in 2003 for a ten-year period for a pilot phase to assess how the funds would be utilised.

Under the agreement, a second tranche was due in 2013. However, the LHDA failed to pay, triggering more than a decade of legal disputes.

The compensation is based on a 50-year lease period. The second tranche was meant to cover the remaining 40 years.

Sepiriti said the Ukhopo-Maliba-Matšo Society in Bobete received about M2.7-million (M1=R1) for the initial period. Other associations were paid amounts ranging from M500,000 to M3-million.

Many associations had been reluctant to pursue legal action, with some members fearing that the litigation was simply a way to “milk their money”.

This changed after the appeal judgment on 7 November 2025. Since then, 21 more associations have approached Sepiriti to pursue their claims.

Fresh demands

Sepiriti has sent formal letters of demand to the LHDA. A letter of demand on 26 November for the second tranche represented seven groups: Imoneng Monoana ka Lihloliloeng Liphakoe Society, Kamohelo Khoanyane Association, Malula Moho Society, Lihloliloeng ke Bophelo Association, Koala Malingoana Association, Khutlo se Shoetsoe Society, and Kutloano e Phahamisa Bophelo Methalaneng Society.

A second letter on 9 December was sent on behalf of three more groups: Akofang Maapola Association, Thabana Sefako Association, and Moqekela Association.

A failure by LHDA to comply would result in further litigation, relying on the precedent set in the Ukhopo-Maliba-Matšo Society case.

The LHDA had halted compensation payments in 2013 based on a consultant’s report that claimed there was “no evidence” of compensable losses.

But the Court of Appeal judgment ruled that the LHDA could not rely on internal policies or consultant reports to override its constitutional and statutory obligation to compensate communities for the loss of their riverine resources. These included firewood, fish, medicinal plants, and grazing land.

The court noted that the authority had neither consulted the affected communities nor obtained the necessary ministerial approval before stopping payments.

The court ordered the LHDA to settle the outstanding compensation within 90 days, a deadline that expired on Saturday, 7 February.

Financial exposure

The potential financial impact of the claims is expected to be in the millions.

Responding to questions from GroundUp, LHDA spokesperson Mpho Brown confirmed that the authority had received the letters of demand.

Asked whether the LHDA intended to negotiate the additional claims, Brown said no formal decision had yet been taken, and that the correspondence was still under internal and legal consideration.

The LHDA said that “the specific compensation amount payable has not yet been finalised” and remained subject to engagement with the community.

While accepting the Ukhopo judgment, the LHDA said each claim must be assessed on its own merits.

Brown declined to comment on the overall budgetary impact of the 21 additional claims, saying it would be “premature to speculate” and that any financial implications would be dealt with through established governance and approval processes.

Having failed to pay on 7 February, pressure is mounting on the LHDA.

On Monday, lawyers for the associations met with the LHDA. GroundUp understands that this was to make payment arrangements.

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