Southern Palace 440 (SP) signed a contract on 22 May 2012 with LNW to sell 10 million cubic metres of water a year for 30 years out of the Blyde River Dam at a tariff of R0,07658/ m³, adjusted annually. Allegations have been made that SP was reselling the water to Hoedspruit farmers at R0,15/ m³.
LNW’s primary mandate is to provide bulk water services to an area of about 80 000km² in Limpopo. SP’s director, Soren Nielsen, entered into the bulk water supply agreement with LNW. However, the Lower Blyde River Water Users Association is up in arms about the deal. Spokesperson Jurie van Vuuren said SP was not a water service provider and should not be permitted to do so. He said the association had lodged a complaint with the Department of Water Affairs.
“We are unhappy that no tender process was followed and we believe the association should be the mandated water service provider in this area,” he said. Nigel Adams, head of the Blue Scorpions, confirmed there was an investigation which was currently in its final stages. Simon Mpamonyane of the LNW said the organisation had a permit to extract and distribute raw water from the Blyde and Olifants Rivers.
“LNW entered into an agreement with SP for bulk water supply to their proposed developments. It was expressly indicated in the agreement that water would be used solely for these purposes. “We are not aware of them selling water to other users,” he said. Responding to Van Vuuren’s concerns regarding the tender process, Mpamonyane said that no tender had been awarded.
“The conclusion of the bulk water provision was as a result of negotiations and discussions,” he added. According to Mpamonyane, there were no restrictions imposed on SP regarding their water rights. Jacques Smalle, Democratic Alliance spokesperson in Limpopo said: “Corrupt contractors and authorities who don’t respect the value of water, end up causing unnecessary hardship to families and loss of income for businesses. The DA calls for decisive action to be taken against both the LNW and SP.”
Nielsen said that SP consultant Robert Mbwana had worked according to the Act to get the application approved.
“When SP was to have a water licence approved, a meeting was called with the office of the Limpopo premier, LNW, the DWA Limpopo and SP. “At this meeting it was agreed that instead of SP going through with the application for its own water licence, LNW would supply SP according to the bulk service agreement,” he said.
Nielson said SP had planned to irrigate 1 172ha of land but that it was waiting for a clear decision from DWA’s licensing department in Pretoria. “We’ve been waiting nine months. While everybody is talking about creating jobs, this water is wasted, flowing over the Blydepoort dam wall and into the Indian Ocean.” Francois van der Merwe of the DWA said: “The feedback that I received is that the investigation on the lawfulness of the transfer of water to be used for irrigation is still in the early stages and I have so far not received any further information.”