MASERU – The European Investment Bank (EIB) has approved a €140 million (M1.3 billion) loan for the construction of Metolong Dam and its water treatment works.
The Metolong project is an ambitious government-initiated programme that seeks to provide water to the capital Maseru and other peri-urban areas.
The project is set to be completed in 2013.
A team from the EIB visited Metolong Dam and the water treatment project for due diligence and appraisal in November last year.
In an interview with the Sunday Express on Friday, Metolong Authority planning manager Keith Reynolds said the funds will be used for the construction of the conveyance system that will transport water from the treatment site to the designated points.
“Essentially the EIB funds will be used for the construction of the primary line which will transfer water to Maseru and the secondary lines to Morija, Mazenod and Roma,” Reynolds said.
The loan will also be used for environmental and social management and institutional support for the project.
Reynolds said six contractors had pre-qualified for the construction of the primary and secondary lines that will deliver treated water to Maseru, Mazenod, Morija and Roma.
“The report on the six contractors has been submitted to EIB and we should have a response hopefully in about two weeks’ time,” he said.
Reynolds said the project was on course adding that he was confident that all components will be completed within the specified times.
He said construction of the water treatment plant located near the dam site was expected to start early next year.
An Italian contractor, CMC, which is in a joint venture with Botjheng from Botswana, was awarded a US$61 million contract to build the water treatment plant.
“The contract is a design-and-build type of contract. The company has already been awarded the tender,” Reynolds said.
The construction of the 53 million cubic square metre dam is expected to begin next year, he said.
Reynolds said they were expecting that the project could face a shortfall in terms of funding.
“There might be a potential shortfall in funds for the construction of the dam but we will know when the contractors have given their prices for the project,” he said.
Reynolds said donors had however given assurances that they would add more funds should the need arise.
The acting chief executive officer at Metolong Authority, Paul Collins, said there were huge opportunities for some business sectors once the project kicked off.
“There is going to be a lot of opportunities for sectors such as the transportation sector once the construction process is in full swing,” Collins said.
There are however fears that local construction firms might not have the capacity and financial muscle to qualify for these huge projects.
“We do however strongly encourage large contractors to work together with local contractors in these projects,” Collins said.
Other funding organisations behind the Metolong project include the World Bank, Millennium Challenge Corporation, South African Development Bank, Saudi Development Bank, Opec Fund, Kuwait Fund and Arab Bank for Economic Development in Africa.