CiteSeerX — WCD Pilot Case Study* Orange River Development

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Orange River Development Project,

South Africa

Final Report: November 2000

Prepared by the World Commission on Dams (WCD) Secretariat

Secretariat of the World Commission on Dams P.O. Box 16002, Vlaeberg, Cape Town 8018, South Africa

Phone: 27 21 426 4000 Fax: 27 21 426 0036.

Website: http://www.dams.org E-mail: [email protected]

* See note on pilot study on page viii

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This is a working paper prepared for the World Commission on Dams as part of its information gathering activities. The views, conclusions,

Disclaimer

This is a working paper of the World Commission on Dams - the report published herein was prepared for the Commission as part of its information gathering activity. The views, conclusions, and recommendations are not intended to represent the views of the Commission. The Commission's views, conclusions, and recommendations will be set forth in the Commission's own report.

Please cite this report as follows:

World Commission on Dams. Orange River Development Project, South Africa, Case Study prepared as an input to the World Commission on Dams, Cape Town, www.dams.org.

The WCD Knowledge Base

This report is one component of the World Commission on Dams knowledge base from which the WCD drew to finalize its report “Dams and Development-A New Framework for Decision Making”.

The knowledge base consists of seven case studies, two country studies, one briefing paper, seventeen thematic reviews of five sectors, a cross check survey of 125 dams, four regional consultations and nearly 1000 topic-related submissions. All the reports listed below, are available on CD-ROM or can be downloaded from www.dams.org

Case Studies (Focal Dams)

• Grand Coulee Dam, Columbia River Basin, USA

• Tarbela Dam, Indus River Basin, Pakistan

• Aslantas Dam, Ceyhan River Basin, Turkey

• Kariba Dam, Zambezi River, Zambia/Zimbabwe

• Tucurui Dam, Tocantins River, Brazil

• Pak Mun Dam, Mun-Mekong River Basin, Thailand

• Glomma and Laagen Basin, Norway

• Pilot Study of the Gariep and Van der Kloof dams- Orange River South Africa

Country Studies

• India

• China

Briefing Paper

• Russia and NIS countries

Thematic Reviews

• TR I.1: Social Impact of Large Dams: Equity and Distributional Issues

• TR I.2: Dams, Indigenous People and Vulnerable Ethnic Minorities

• TR I.3: Displacement, Resettlement, Rehabilitation, Reparation and Development

• TR II.1: Dams, Ecosystem Functions and Environmental Restoration

• TRII.1: Dams, Ecosystem Functions and Environmental Restoration

• TR II.2: Dams and Global Change

• TR III.1: Economic, Financial and Distributional Analysis

• TR III.2: International Trends in Project Financing

• TR IV.1: Electricity Supply and Demand Management Options

• TR IV.2: Irrigation Options

• TR IV.3: Water Supply Options

• TR IV.4: Flood Control and Management Options

• TR IV.5: Operation, Monitoring and Decommissioning of Dams

• TR V.1: Planning Approaches

• TR V.2: Environmental and Social Assessment for Large Dams

• TR V.3: River Basins – Institutional Frameworks and Management Options

• TR V.4: Regulation, Compliance and Implementation

• TR V.5: Participation, Negotiation and Conflict Management: Large Dam Projects

• Regional Consultations – Hanoi, Colombo, Sao Paulo and Cairo

• Cross-check Survey of 125 dams

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The Study Team

The following RSA consultants contributed sectoral reports that were subsequently compiled into a final draft report by WCD secretariat staff :

Maarten van Veelen BKS consulting Engineers Design and operations

Geoff Antrobus Rhodes University Agricultural economics

Bryan Davies University of Cape Town Freshwater Biology

Nicola Bergh University of Cape Town Freshwater Biology

Chris de Wet Rhodes University Social anthropology

Andrew Ainslie Rhodes University Social anthropology

Barri Nkono University of Western Cape Historical and social aspects Muzi Muziya National Institute for Economic Policy Macro-economics

Tony Emmett Human Sciences Research Council Policy and decision-making Azghar Adelzadeh National Institute for Economic Policy Macro-economics

Kyra Naudascher-Jankowski National Institute for Economic Policy Distributional analysis

WCD Secretariat used this report to provide guidance for case study teams involved in the WCD work programme in Brazil, Norway, Pakistan, Thailand, Turkey, USA and Zambia/Zimbabwe

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Acknowledgements

WCD is grateful for the assistance and support provided to this study by the Department of Water Affairs and Forestry, the Ministry of Agriculture, and the public utility (ESKOM). WCD would like to thank BKS for permission to use figures 2 and 3.

WCD would also like to thank all the participants at the consultation meetings for assisting in the refinement of this methodology and for providing information and comment on the content and process of this study between October 1998 and October 1999.

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Financial and in-kind Contributors:

Financial and in-kind support for the WCD process was received from 54 contributors including governments, international agencies, the private sector, NGOs and various foundations. According to the mandate of the Commission, all funds received were ‘untied’-i.e. these funds were provided with no conditions attached to them.

• ABB

• ADB - Asian Development Bank

• AID - Assistance for India's Development

• Atlas Copco

• Australia - AusAID

• Berne Declaration

• British Dam Society

• Canada - CIDA

• Carnegie Foundation

• Coyne et Bellier

• C.S. Mott Foundation

• Denmark - Ministry of Foreign Affairs

• EDF - Electricité de France

• Engevix

• ENRON International

• Finland - Ministry of Foreign Affairs

• Germany - BMZ: Federal Ministry for Economic Co-operation

• Goldman Environmental Foundation

• GTZ - Deutsche Geschellschaft für Technische Zusammenarbeit

• Halcrow Water

• Harza Engineering

• Hydro Quebec

• Novib

• David and Lucille Packard Foundation

• Paul Rizzo and Associates

• People's Republic of China

• Rockefeller Brothers Foundation

• Skanska

• SNC Lavalin

• South Africa - Ministry of Water Affairs and Forestry

• Statkraft

• Sweden - Sida

• IADB - Inter-American Development Bank

• Ireland - Ministry of Foreign Affairs

• IUCN - The World Conservation Union

• Japan - Ministry of Foreign Affairs

• KfW - Kredietanstalt für Wiederaufbau

• Lahmeyer International

• Lotek Engineering

• Manitoba Hydro

• National Wildlife Federation, USA

• Norplan

• Norway - Ministry of Foreign Affairs

• Switzerland - SDC

• The Netherlands - Ministry of Foreign Affairs

• The World Bank

• Tractebel Engineering

• United Kingdom - DFID

• UNEP - United Nations Environment Programme

• United Nations Foundation

• USA Bureau of Reclamation

• Voith Siemens

• Worley International

• WWF International

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This is a working paper prepared for the World Commission on Dams as part of its information gathering activities. The views, conclusions,

List of Annexes

Annex 1: Purpose of the case study programme

Annex 2: Basin Description: Climate, hydrology and geomorphology Annex 3: Conversion rates – Current Rand to 1998 US$

Annex 4: Project Costs

Annex 5: Predicted area, cropping pattern and gross agriculture value

Annex 6: The pre-dam social context: Demographic landscape and control of the land Annex 7: Two contrasting case stories of resettlement

Annex 8: Differing perceptions of the effects of resettlement on farm Workers Annex 9. Summary of outcomes of displacement for farmers and workers Annex 10: Definition of the Instream-flow requirement

Annex 11: Cumulative environmental impacts within the catchment Annex 12: Institutional arrangements

Annex 13. Minutes from the First stakeholder meeting

Annex 14. Workshop proceedings and Comments from the final consultation meeting

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List of Figures

Figure 2.1: Location of Gariep and van der Kloof Dams in South Africa...8

Figure 2.2: Location of inter-basin transfer schemes to the Great Fish and Sundays River (Courtesy BKS). ...9

Figure 2.3: Location of Irrigation Areas along the Middle and Lower Orange River (Courtesy BKS) ...10

Figure 3.1: Temporal Pattern of Expenditure on Major Project Components, 1963–79 ...20

Figure 3.2: Predicted and Actual Irrigated Areas ...21

Figure 3.3: Inter-basin Water Transfers through the Orange-Fish Tunnel ...26

Figure 3.4: Seasonal Variation in Inter-Basin Transfers through the Orange-Fish Tunnel ...26

Figure 3.5: Predicted and Actual Hydropower Generation at Gariep Dam ...29

Figure 3.6: Predicted and Actual Hydropower Generation at Van der Kloof Dam ...30

Figure 3.7: Natural and Regulated Flow Regimes of the Orange River ...36

Figure 3.8: Median Monthly Flows at Boegoeberg Measured before (a) and after (b) Major Impoundment ...36

Figure 3.9: Variation in Monthly Runoff at the Orange River Mouth...39

List of Tables

Table 3.1: Projected and Actual Completion Dates for Components of the Orange River Development Project ...12

Table 3.2: Design Changes of Major Components of the Orange River Development Project...15

Table 3.3: Evolution of Cost Estimates on Orange River Development Project ...18

Table 3.4: Predicted and Actual Cropping Pattern (ha) ...22

Table 3.5: Comparison of Predicted, Pre-Project (1971–6), and Recent Crop Production...22

Table 3.6: Gross Value of Crop Production in 1998 US$...23

Table 3.7: Contribution of Field and Horticultural Crops to GVAP, 1976–93 (%)...23

Table 3.8: Percentage of Farms where more than 50% of Gross Farm Income is Derived from Animal Production per Region, 1993 ...24

Table 3.9: Planned Water Supply in the ORDP...25

Table 3.10: Allocation and Usage of Inter-Basin Transfers from the Orange River Basin to the Fish- Sundays Basin...27

Table 3.11: Projected Installed Capacity of Power at Planned Stations in 1962/3 White Paper ...28

Table 3.12: Economic Value of Hydropower Production from inception to 1998...32

Table 3.13: Comparison of Flood Peaks With and Without Dams...33

Table 3.14: Emission Levels from Steam Coal Power Plant ...45

Table 3.15: Number of Farms and Average Sizes (ha), 1971 and 1993 ...51

Table 3.16: Social Context Prior to Land Acquisition – Farmers and Farmworkers in Districts Affected by Gariep and Van der Kloof Dams, 1962–3 and 1964–5 ...52

Table 3.17: Number of People Displaced by Gariep and Van der Kloof Reservoirs ...53

Table 3.18: Trends in Labour Force Provided by Proprietors, Tenants, and their Family Members in Downstream Adjacent Districts and in Non-adjacent Districts of Northern Cape...56

Table 3.19: Trends in Regular Employment (Regular Farmworkers and Domestics/Servants) in Downstream Adjacent Districts and in Non-adjacent Districts of Northern Cape...56

Table 3.20: Number of Seasonal and Casual Workers ...57

Table 3.21: Cumulative Impacts of Dams in the Orange River Catchment on the Variables Controlling Riverine Ecosystems ...59

Table 3.22: Predicted, Actual, and Unexpected Outcomes of the ORDP...62

Table 5.1: Chronology of the ORDP ...72

Table 5.2: Number of Dams Commissioned in South Africa (by decade) ...77

Table 8.1: Summary of questionnaire responses by interest group...104

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Note on Pilot Study

The World Commission Dams (WCD) faced a considerable challenge in meeting the mandate given to it by the Gland reference group at its inception in April 1997. This included, among other things, an assessment of the "development effectiveness" of dams, an issue that the Commission decided to address through thematic studies, the cross-check survey and a series of case studies of dam projects worldwide with a view to learning lessons from these experiences.

The aim of the pilot study of the Orange River Development Project in South Africa, a major initiative of the South African Government beginning in the early 1960’s, was to develop the methodology to be used for the 7 WCD focal dam project/river basin case studies being undertaken world-wide. It was designed to test a common approach that sought to inform the Commission on development effectiveness as well as a range of issues associated with the planning, design, appraisal, construction, operation and decommissioning of large dams. The Minister for Water Affairs and Forestry gave his agreement to the pilot study in September 1998.

The ORDP was a major project involving two dams on the Orange River and a diversion tunnel that was planned during the apartheid years in the 1960s, and which has hydropower, irrigation, water supply and flood control functions. The multi-purpose nature of the project provided a good opportunity to test the methodology, and the study was undertaken between October 1998 and March 1999.

In adopting a pilot approach for methodology development, it is recognised that this study addresses real issues and real experiences that can not simply be used as a "testbed" without giving some substantive feedback to the interest groups affected by the ORDP on the findings of the pilot study.

This is the main purpose of this report. A secondary purpose was to provide a model for the consultants working on the other case studies world-wide. Where additional work would be required to bring the study up to the level of a full case study, this is identified in the text.

Methodological improvements following the experience of the pilot study

The following parts of the case study methodology were improved or addressed as a result of the study, and these modifications were presented in detail in the “Methodology Guidelines for the Implementation of Phase II of the WCD Case Studies” provided to case study team leaders.

Revision of data sheets and enquiry forms

The two sets of pilot data collection sheets (focal dam and cross-check survey), and the enquiry form were thoroughly tested and the pilot versions were revised to be more flexible and to include only data points of direct relevance to the study. The full data collection sheet for the focal dam was scaled down. Only two responses were received on the stakeholder enquiry form, which was felt to be too long and complex and a revised stakeholder interview process was therefore devised.

The consultation process

Valuable lessons were learned on the composition, structure and agenda of the scoping meetings that were put into practice in other case studies worldwide. Experience from the final stakeholder meeting demonstrated the challenge inherent in soliciting views on complex issues from a wide range of stakeholders. It also showed that due balance must be found between a qualitative and a quantitative approach. Experience from the second stakeholder meeting proved invaluable in the 7 case studies undertaken around the world, and the Secretariat substantially modified its approach as a result of the experience of the Orange River meeting.

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The structure and content of the report

The final report has gone through a series of revisions before adopting the proposed structure. In addition a number of gaps were identified of which the following are the most important :

1. Definition of "the project" used as a baseline for defining the predicted benefits needs to be more rigorous.

2. More emphasis should be placed on operations and operating rules and how these have changed through time since project completion.

3. The methodology for the distribution of benefits analysis should include a time dimension. One matrix should be completed for the context at project completion, and another for today’s context.

The positively and negatively affected groups should be better disaggregated and quantified.

4. Sedimentation/reservoir characteristics should be included in “Project design - lifetime of the reservoir.”

5. Strengthen “Context at the time of project planning” for each sector.

6. Hydropower benefit methodology should use real tarifs not simulated benefits.

7. Basin-wide issues and cumulative impacts should be strengthened.

8. Strengthen the section on justification for the project (context at the time) and Criteria and guidelines.

This pilot study therefore greatly contributed to refining and improving the case study methodology, and provided a model to guide the work of the case study teams. In the normal case study process, the final report would have taken into account the detailed comments given by stakeholders through the consultation process, and adressed them aftre the meeting, wherever possible. Given the timing and nature of the pilot study it was not possible to respond to the constructive criticism received, and this should be borne in mind by the reader. The draft report remains substantially the same as the circulation draft, with the exception of Chapter 7 – Lessons learned, that draws in discussions from the final meeting.

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Executive Summary

Proposals for irrigation projects in the Orange River Basin were initiated in the 1920s to meet the increased need to utilise its water resources given South Africa’s semi-arid climate. These proposals were considered too costly to be implemented through the 1950s, but development of the Orange River Basin became more of a priority after the successive electoral victories of the Nationalist Party in 1948, 1953 and 1958.

The actual decision to plan a comprehensive Orange River Development Project (ORDP), however, was triggered by the objective of the Nationalist Party Government to stem the outflow of capital from South Africa. This flight of capital was partially caused by the increasing domestic resistance and international criticism against the Governments Apartheid policies, particularly following the Sharpville massacre in 1961. The decision to embark on the ORDP was also motivated by the Nationalist Party Government’s goal of building a political symbol to Afrikaner Nationalism and a monument to the “grand scheme of apartheid” at a time when South Africa had just withdrawn from the British Commonwealth.

The initial planning proposal for the ORDP was quickly assembled in the early 1960s by the Department of Water Affairs oriented by the various development policies of the Nationalist Party Government. The ORDP fit with the Government’s interventionist policies of ‘economic nationalism’

and satisfied a number of the Nationalist Party’s key constituencies. In particular, the Nationalist Party Government’s support for White agricultural interests as well as decentralised industrial development was to be served by the scheme.

The politically motivated ORDP that was subsequently proposed by the Department of Water Affairs was an ambitious initiative which sought to provide substantial benefits for South Africa, the Orange River Basin, and White farmers in particular during the core years of the Apartheid regime in South Africa. The major objectives of the scheme included:

• provision of irrigation for increased agricultural production,

• supply of water for municipal and industrial use,

• generation of hydro-electric power for peaking purposes,

• prevention of damaging floods,

• creation of recreational facilities,

• further population settlement in the basin,

• creation of additional employment opportunities,

• stimulation of water and agricultural based industrialisation and the regional economy.

These objectives were geared towards the broader local, regional and national development goals of meeting the increasing consumption needs and raising the living standards of a rapidly growing South African population.

As a result of the rapidity with which the 1962-63 planning proposal was assembled, many of the baseline surveys were cursorily conducted and few of the planning assumptions were thoroughly examined. While potential sedimentation problems were assessed, soil studies were cursorily completed and investigation of environmental impacts was not conducted. Moreover, the ORDP was a much larger and more complex water resources scheme involving dams than had been previously promoted by the Government of South Africa. Because of its size, complexity and cost, the scheme was planned to be completed over 6 phases. After minimal appraisal, the South African Parliament quickly authorised implementation of only the 1^st phase of the ORDP for R85million in 1962-63.

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Information disclosure and the participation of project-affected peoples in the planning and appraisal of the ORDP was not regular practice at the time and was thus limited. Some public commentary on the proposed scheme was received early on from independent scientists and technical experts in South Africa but with little effect on the planning and implementation of the ORDP through the mid-1970s.

White farmers to be displaced by the Gariep and Van der Kloof reservoirs were notified but, despite being somewhat organised and even taking the Government to court a number of times, did not have much voice in determining compensation arrangements. Given the Apartheid context, Black and Coloured peoples were neither notified nor compensated as these groups had been almost completely dispossessed of their lands and rights in the Orange River Basin and across South Africa by the time of the sanctioning of the ORDP.

The rapidity with which the ORDP was initially planned and approved, as well as the complexity of the proposed scheme, resulted in the need for further detailed planning with the assistance of private domestic and foreign consultants. More detailed planning and appraisal, as well as the discovery of more economically viable alternatives, resulted in design changes and additions to the ORDP during construction. For example, based on a more in-depth assessment after Parliamentary approval of the ORDP, the national electricity utility (ESKOM) persuaded the Government in 1964-65 to raise the heights of both the Gariep and Van der Kloof dams immediately to meet increasing demand for peaking power in South Africa. Although only R85million was allocated to implement the first phase of the ORDP by Parliament in 1962-63, the design changes proposed by ESKOM and more detailed planning resulted in a significant increase in the cost of the scheme.

In fact, an approximately four-fold increase in the estimated costs of the scheme over the decades is attributable to unplanned design changes, the need for foreign technical assistance with design and construction, the non-inclusion of inflation estimates in original planning projections, and unexpected costs for unplanned mitigation measures. Shortfalls in funding to meet rising costs resulted in further delays of the ORDP. Design changes and shortfalls in funding also led to schedule overruns during construction of the ORDP which in turn resulted in further cost increases. Because design changes and rising costs were considered amendments to the original authorisation given for phase 1 of the ORDP, however, further Parliamentary review was not required for increasing the actual expenditures on the scheme.

Project infrastructure was substantially modified during implementation, and regular design changes meant that some features of the planned scheme were not built as the context evolved and other options were explored. Additions unplanned at the outset, such as Wellbedacht dam, affected the assumptions made and actual construction of the planned components. The later construction of the upstream Wellbedacht dam (which subsequently silted up) for municipal water supply effectively, but unexpectedly, reduced sediment inflows into Gariep reservoir, thus prolonging its life.

The dynamics during planning, appraisal and design identified above clearly shaped the outcomes of the ORDP. As this pilot study shows, the actual achieved benefits of the ORDP are less than that which was predicted for irrigated agriculture, both in terms of area (46-57% of planned) and value of production (27%). On the other hand, outcomes are greater than predicted in the areas of agricultural productivity (166-457%) and the economic value of hydropower generation (107 %). Actual hydropower generated is broadly as predicted (although from an installed capacity over twice as large as that which was originally envisioned). The generation of dynamic system benefits for the grid from hydropower unexpectedly added 13% to the overall value of hydropower generation.

Objectives for flood control and recreation were broadly met, although they were unquantified at the time of project planning. Unanticipated environmental impacts of the scheme include the proliferation of biting blackfly that caused damage to livestock and the recreation industry requiring an annual control programme of around 2 million Rand (equivalent to 330,000 in 1998 U.S. dollars).

In addition, the ORDP disrupted flows and driving variables for the natural riverine ecosystem and river mouth (a wetland site of international importance).

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A comparison between the planned and actual settlement of new White and Coloured families in the command areas nor the predicted and actual displacement/resettlement from the ORDP was not possible due to data inavailability. However, compensation of White farmers seems to have been quite generous although less so for the payments made for land expropriations required for the Van der Kloof than the Gariep reservoir. Official compensation was neither planned nor offered to the Black and Coloured people negatively affected by the ORDP but the numbers of persons in these categories was already quite low given the centuries of dislocation and marginalisation to which they had already been subjected. Employment and regional development goals are difficult to verify but it seems that jobs were saved by the ORDP in the face of growing on-farm rationalisation and intensification nation-wide. The actual effect of the scheme on national agricultural production was not large and national economic growth even less, although data constraints limited analysis in these areas.

Although data limitations preclude firm conclusions, the distributional consequences of the ORDP during the initial period of the 1970s throughout the mid-1980s after its commissioning were not surprising given the anticipated and actual outcomes of the scheme as well as policy context in which it was planned and implemented. The South African population as a whole benefited from the increased agricultural production, added supply of peaking power, and recreational opportunities created although the overall contributions to the national economic value in these sectors and total gross national product from the scheme are likely to have been small or negligable. In addition, South African taxpayers are likely to have borne most of the financial costs of the scheme as cost recovery from users during this early period was relatively low.

Within the Orange River Basin, municipalities and industries most likely benefited from the water supplied by the ORDP but the access of different racial groups to this water supply was likely to have been unequal. Recreation industries within the basin also benefited by the new recreation resources created by the scheme although some business were negatively affected by the increased incidence of biting blackfly. Similarly, blackfly infestation somewhat reduced the large share of overall benefits derived from the increase availability of irrigation by White farmers and a smaller number of Coloured farmers who were either settled or resettled in the command areas of the ORDP. Some additional Coloureds as well as some Blacks who may or may not have been those displaced by the scheme did benefit from the mostly seasonal and casual jobs generated. Finally, while White farmers who were displaced did receive generous compensation, Coloureds and Blacks were not offered payment for their losses by the Government.

On the other hand, these distributional effects of the ORDP did change as a result of the changing operation and replanning of the ORDP in conjunction with the evolution of societal values and Government policies in South Africa over time. The original planning documents envisioned that operations of the ORDP would shift from an early prioritisation of power generation followed by irrigation, municipal water supply and flood control to one in which needs for municipal water supply and irrigation would increasingly take precedence over time. The evolution of operating rules for the ORDP after the time of commissioning in 1971 were not determined in this study and thus further conclusions can not be offered at this time in this area.

However, a reappraisal of the ORDP was undertaken with the Orange River Systems Analysis between 1988 and 1992 which found that potential demand for water in the Orange River Basin would far exceed supply by the year 2020. The need for a comprehensive replanning exercise was thus confirmed. Correspondingly an Orange River Replanning Study, the most comprehensive assessment of the Orange River Basin and ORDP since the original planning efforts between 1960 and 1965, was undertaken between 1994 and 1998. The appraisal also assessed how the construction of the upstream Lesotho Highlands Water Project (LHWP), jointly planned by South Africa and Lesotho beginning in the 1980s, might condition changes in the operation and effects of the ORDP.

The most important shifts in criteria and guidelines that affected the decision-making and effects of the ORDP occurred as a result of the recommendations of three new policy frameworks promulgated

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during the ORDP implementation period: the 1970 Report of the Commission of Enquiry into Water Matters, the 1986 Report on the Mangement of Water Resources in the Republic of South Africa, and the new water regulations adopted after the transition to democracy in 1994 (especially the 1998 Water Act). These documents highlight the gradual change in South African policies from an emphasis on government subsidisation to full cost-recovery from users, as well as from agricultural production and industrial development to employment creation and provision of basic needs. A shift from technocratic to participatory decision-making and from a technical approach to one that takes human rights, environmental and social issues into consideration, and distributes ORDP benefits across a broader section of South Africa society also occurred.

As a result, trends towards greater public participation, more in-depth financial and economic analysis, as well as more comprehensive examination of social and environmental issues in planning and options-assessment are evident in the decision making processes around the ORDP and LHWP over time. The more recent focus has been on altering the operation and management of the ORDP to improve the functioning of the scheme and to reorient it towards generating outcomes reflective of the new values that have been internalised in South Africa policies after the 1994 transition. In addition, a greater emphasis on basin-wide management, and coordination between the ORDP and LHWP in particular, seems to have been initiated during the 1990s. However, some conflicts have emerged between these new criteria and guidelines such as that between the prioritisation of cost-recovery versus the goal of achieving greater equity in outcomes.

Within this changing context, attention to environmental concerns has also grown continually since project inception in 1962-63 and these concerns have been increasingly incorporated in planning, appraisal and operation of the ORDP. Environmental concerns have only recently been given force of law under the 1998 Water Act. Much effort, time and money has been spent in setting in-stream flow requirements (IFRs). However, the process of implementation appears far less rigorous. In this context, the passage of the 1998 Water Act has provided the legal framework for the formulation of IFRs for the ORDP but the regulations necessary for guiding implementation have yet to be promulgated.

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1. Overview of the World Commission on Dams Global Case Study Programme

The World Commission on Dams (WCD) faces a considerable challenge in meeting the mandate given to it by the reference group at its inception in 1997. This includes, among other things, an assessment of the “development effectiveness” of dams, an issue that the Commission has decided to address through thematic studies, the cross-check survey, and a series of case studies of dam projects worldwide with a view to learning lessons from these experiences.

This report is the product of one of eight case studies being undertaken worldwide with a common methodology and approach that seeks to inform the Commission on development effectiveness and on a range of issues associated with the planning, design, construction, operation, and decommissioning of large dams. It concerns the Orange River Development Project (ORDP), a major initiative of the South African government beginning in the early 1960s. The project aimed to irrigate 301 000ha of land, supply water to municipalities and industries, generate power, and reduce the occurrence of floods.

In this report, particular emphasis is placed on comparing the outcome the project planners intended with the results achieved. Throughout the study, a key distinction is therefore drawn between that which was predicted and that which was not. This “predicted and actual” approach is important because the purpose of the study is not to answer the question “should this dam project have been implemented?” but rather to ask what its effect has been. In addition, the study seeks to document how effective the planning and implementation process has been in delivering the anticipated benefits, and how the decision-making process has addressed changing circumstances and unexpected consequences since the project was completed. The focus on the planning and decision-making process is essential, as lessons learned in this area will directly inform the Commission’s findings and its proposals for future decision-making frameworks as well as criteria and guidelines (see Outputs 2 and 3 of the WCD Work Programme).

The concept of “development effectiveness” is taken in the broadest sense. It includes not only the relevance and appropriateness of large dams as a response to the needs that motivated their construction (eg irrigation, electricity generation, flood management, water supply, navigation, and other multi-purpose benefits), but also the projected versus actual services and benefits delivered. It also assesses the costs and impacts associated with the results obtained, the distribution of gains and losses among groups, and the general conditions under which the dams were built and have been operated.

The study uses existing data sources and reports to inform its assessment, as there is not sufficient time for additional research to be undertaken. In this respect, the availability of data in existing studies and reports has limited the findings of the study. In parallel to the study process, and as an integral part of the methodology, two consultation meetings were included, one after the scoping stage, that mapped out the issues to be addressed and identified available data sources, and one to consider the draft final report. These meetings were intended to ensure that the views of different interest groups could be considered by the study team, and provided opportunities for comment and input.

The Commission’s approach recognises that there is not always unanimity in the interpretation of the available data, or in the perceptions of different interest groups, and that these convergent and divergent views are a key aspect of differing perceptions of development effectiveness. Assessing development effectiveness thus entails taking account of the views and perspectives of different stakeholders and the groups affected by the project. This report will not take up a single “position”, but it will report on the views of different groups. Equally, it will not pass judgement, with the benefit of hindsight, on whether or not the project should have been built, or how things could, or should,

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have been done differently. Nor will it comment on the future evolution and management of the project.

The purpose of the study is to learn lessons from the past, focusing on those that are especially relevant to the planning, implementation, and operation of large dams worldwide.

The intention of the case study is to provide an analysis of performance, an assessment of how the decision-makers planned and implemented the different phases of the project, and an appraisal of the way in which decision-making has responded to an evolving social, economic, and political context since project completion. The category “unexpected” includes all features and consequences not included in the original project design. At times, this will refer to issues genuinely unknown to the planners, and at times to issue known at the time but unaccounted for or neglected in the planning process.

The case study methodology is based on six key questions that provide the foundations for the assessment of performance and decision-making:

• What were the projected versus actual benefits, costs, and impacts?

• What were the unexpected benefits, costs, and impacts?

• What was the distribution of costs and benefits, ie who gained and who lost?

• How were decisions made?

• Did the project comply with the criteria and guidelines of the day?

• What lessons can be learned for today’s context?

Further details on the case study methodology and process are given in Annex 1, along with the list of case studies being undertaken.

The report is broadly structured according to the six key questions listed above. Chapter 2 introduces the project purpose, design features, and predicted benefits. Chapter 3 deals with project performance, structured by sector, and enumerates the studies findings concerning predicted and unexpected costs, benefits, and impacts. The predicted and unexpected are presented together for each sector to improve the clarity of the analysis. However, a summary of findings is also presented at the end of the chapter.

Thereafter, the chapters follow the order of the key questions above. Chapter 4 provides a sketch of the distributional intentions and outcomes of the project. The decision-making process that shaped the planned and actual outcomes of the project is examined in Chapter 5, while Chapter 6 offers an analysis of evolution and compliance with criteria and guidelines. Chapters 7 and 8 draws out convergent and divergent views on development effectiveness along with lessons to be learned for the WCD process. As this is a pilot study, it is indicated in the text where additional work would be required for a full case study.

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2. The Context and Scope of the Case Study on the Orange River Development Project

This chapter of the report provides brief background information on the context in which the ORDP was initiated by the government of South Africa in the early 1960s. It first offers a physical description of the Orange River Basin. It also identifies the main objectives and components of the multi-purpose ORDP, of which the Gariep and Van der Kloof dams have been identified as the two focal dams of this study.

2.1 Orange River Basin

The Orange River (also called the Gariep, the Khoi word for “Great River”, or Dragon River by the San) is the largest in Africa south of the Zambezi, with a total catchment area in excess of one million square kilometres. The Orange River Basin is also the largest watershed in South Africa. More than half the catchment is in South Africa, spanning six of the country’s current nine provinces, with the remainder in the adjacent countries of Lesotho, Botswana, and Namibia. The natural flow of the Orange River constitutes more than 22% of the South Africa’s surface water resources.

The Orange River originates in the Drakensberg mountain range, in what is now the north-east corner of Lesotho. After leaving Lesotho, the river flows westward 2 100km through regions of steadily decreasing rainfall and increasing aridity, finally discharging its water in the South Atlantic Ocean near Alexander Bay. The rainfall at the source is in the order of 2 000mm per year, dropping to less than 50mm per year near the mouth. Evaporation rates range between 2 000mm and 2 500mm per year, generally increasing from east to west.

The main tributaries are the Caledon River, which currently forms part of the western border of Lesotho, the Kraal River, and the Vaal River, which drains large parts of the Free State and southern Mpumulanga. Further downstream, the Orange receives water from the Hartebeest, Molopo, and Fish rivers, the latter which drains a large part of the waters of Namibia.

Under natural conditions, all these rivers are dry several months of the year. The Orange River does not have extensive floodplains or a significant delta and it is deeply incised in the surrounding country between the current South Africa–Lesotho border and Petrusville, which prevents irrigation on a large scale in this area. Further downstream, particularly in the Prieska-Upington area, the land is low lying with large tracts that are fertile, flat and suitable for irrigation. Further details of the physical characteristics of the basin are given in the section on ecosystems below and in Annex 2.

2.2 National Context at the Time of Project Planning

The construction of labour-intensive irrigation settlements along the Vaal and lower Orange rivers began as early as the 1920s and 1930s and the idea may be traced back to 1928, when the administrative head of the Department of Irrigation (later called the Department of Water Affairs – DWA), Dr A. D. Lewis, proposed a scheme to link the Orange and Fish rivers by means of a tunnel.

Although Lewis’ scheme was not implemented, the proposal was revived on several occasions through the following decades, but was considered too costly to undertake. The formal plan for the ORDP was put forward in 1962 (a year after South Africa became a republic under the leadership of Hendrik Verwoerd, the “grand architect of apartheid”).

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Initial surveys and investigations, including drilling for potential sites for dams, were initiated in 1944. However, until the 1950s, no major storage was considered for the Orange River although diversion projects to the Fish and Sundays rivers had been proposed. A project to pump water from Lesotho, which at the time was still a protectorate of Britain, to the Orange Free State (now known as the Free State) in South Africa was mooted around 1955. The project was to be paid for by power generation and most likely would have provided water supplies to the growing Witwatersrand area (now called Gauteng) and not the Orange Free State.

However, during the late 1950s, the development of the entire Orange River increasingly became a priority for South Africa. The reasons for this new direction have to be sought in the historical developments that preceded the scheme and in the political and economic circumstances of South Africa in the early 1960s when a White Paper was eventually tabled in the South African parliament to gain authorisation for the Orange River scheme.

A key to understanding the political economy that gave rise to the Orange River scheme is the period 1948–1960, which Davenport (1977:257–6) has characterised as “the age of the social engineers”.

Although the proposed policies of the nationalists during this period “differed in degree and direction, rather than in kind” (Davenport, 1977:254) from the policies that had preceded them, they were pursued with an enthusiasm and systematic thoroughness that heralded a new period in South African history. This period marked not only the establishment of the foundations of apartheid, but also the peak of concerted efforts to consolidate Afrikaner political and economic power.

With the National Party’s (NP) newly won control over the state in the 1948 and 1953 elections, nationalists were able to consistently increase their control over the economy. As an important part of its election campaign, the NP had courted white farmers who were experiencing labour shortages and rising agricultural wages as a result of the large-scale urbanisation of the African population.¹ The NP promised to curb black urbanisation, and offered farmers state protection, including higher prices for their products.² Until the mid-1950s, the major governing parties were primarily dependent upon rural constituencies. For example, when the NP came to power in 1948, half of its members of parliament were drawn from agricultural backgrounds (Greenberg, 1980:88).

These developments took place against a background of increasing protest and resistance from black political groups and trade unions, and the institution of repressive measures by the state. Prior to 1948, the liberation movement “had experienced almost a decade of growth in size, militancy and level of organisation” (Pampallis, 1991:180). The state responded to these pressures with a series of draconian laws specifically aimed at restricting political activity, including the Suppression of Communism Act of 1950, the Criminal Law Amendment Act of 1953, and the 1953 Public Safety Act. At the same time, a number of laws were enacted that reinforced the marginalisation of non-white racial groups (eg. The Prohibition of Mixed Marriages Act of 1949, the Population Registration Act of 1950, which required that all South Africans be racially classified, and the Group Areas Act of 1950, which designated specific areas for occupation according to racial group).

An additional boost was given to the economy by the development of the newly discovered Orange Free State gold fields. The state also intervened directly in the economy, establishing SASOL in 1950 (to manufacture petroleum from coal), expanding production at ISCOR (the Iron and Steel Industrial Corporation), and setting up the National Finance Corporation and the Industrial Finance Corporation to provide funds for mining and manufacturing. In particular, Afrikaner business people benefited, eg from lucrative government contracts and appointments to official economy boards, and through the transfer of government bank accounts to Afrikaner banks. White farmers also benefited from the stricter pass laws, favourable prices for agricultural produce, and even the provision of prison labour by the state.

The economic resurgence, however, was threatened on two fronts. On the one hand, black resistance to the state was growing. On the other, there was increasing pressure internationally. The growth of the anti-colonial movement through the 1950s and the granting of independence to African colonies in

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the 1950s and 1960s not only raised the hopes of the oppressed in South Africa, but also changed the international context, making white domination less and less acceptable to the international community. The various protests also drew international attention to racial domination in South Africa and attracted condemnation in the United Nations. In particular, the massacres at Sharpeville and in the Cape (and their aftermath) attracted strong international attention and condemnation.

Even before Sharpeville some foreign investors had become nervous that the South African state would not be able to contain the growth of resistance and had begun withdrawing their investments.

After Sharpeville, however, this process accelerated, and between January 1960 and May 1961, gold and foreign exchange reserves dropped by 51% (Pampallis, 1991:214).

In spite of the political upheavals inside the country and the pressures from abroad, the South African economy continued to grow. Trade and currency controls introduced by the government from 1961 were able to stem partially the outflow of capital after Sharpeville, and increased military spending provided a boost to the economy. Furthermore, the setbacks inflicted on black opposition groups provided further encouragement to foreign investors, and from 1964 until the recession of the mid- 1970s, South Africa experienced a period of sustained economic growth.

It was during this period of economic growth and the successful suppression of political opposition within the country, sometimes referred to as “the golden age of apartheid”, that the huge ORDP was planned and executed. Within its historical context, the ORDP may be seen as an outgrowth of the increasing confidence of Afrikaner nationalism³ during this period. Just as the “grand scheme” of apartheid represented the culmination of the social engineering of Afrikaner nationalism’s political dreams, the ORDP may be seen as a culmination of the economic dream of South Africa as the economic giant of the south, as a monument⁴ to Afrikaner confidence.

It was envisaged that the irrigation components of the scheme would increase the value of the South African agricultural production, make provision for the establishment of a large number of irrigation farms, and stimulate the production of meat, wool, milk, lucerne, cotton, wheat, raisins, dried beans, and peas. This was consistent with the important role of white farmers within Afrikaner politics in the first two decades of NP rule.

Thus, a number of unstated goals beyond those benefits predicted in the White Papers were probably instrumental in the decision to embark upon the scheme. One of these was to restore international confidence in South Africa in the aftermath of Sharpeville and the political repression that followed.

Besides demonstrating that South Africa was capable of undertaking a scheme of this magnitude, the ORDP would also provide considerable opportunities for co-operation with foreign governments and business interests. In this regard, the lucrative contracts awarded to French, British, and Italian firms undoubtedly played an important role in securing political support and inward investment from abroad.

The ORDP also had two other implications for international relationships. Firstly, the appointment of international consortia for the construction of the two main dams would provide access to international funding and strengthen South African ties with the French, Italian, and British governments, if only to protect these countries’ interests. Secondly, the importing of foreign technicians for the building of the dams also increased the necessity for international contacts through embassies and departments. Internally, the ORDP also provided major opportunities for South African firms,⁵ as well as employment for both skilled and unskilled (primarily white) workers.

Because of the extensive lobbying that had taken place for providing relief to eastern Cape farmers by linking the Fish and Orange rivers, and the degree of public support for the project, debate on the project was relatively limited. In particular, the United Party found itself in a difficult position because some of its leaders had been actively involved in the lobbying. The debate in parliament tended to focus more on who should take credit for the scheme than on its inherent weaknesses.

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Within this context, the engineers from the DWA were asked to provide a large-scale project in a very short time scale with little opportunity for detailed project planning and assessment.

2.3 The Objectives and Components of the Orange River Development Project

The central objective of the comprehensive ORDP at the time that it was sanctioned by the government of South Africa, in 1962/3, was to store and divert water to promote irrigation and increase agricultural production along the Orange River and in the eastern Cape regions of the country. Secondary aims included municipal and industrial water supply, hydroelectric power generation, and the reduction of severe flood damage.

The 1962/3 “Report on The Proposed Orange River Development Project”, or 1962/3 White Paper, prepared by South Africa’s DWA, projected the following benefits from the scheme:

• the irrigation of some 301 000ha (360 000 morgen) of land and corresponding increases in agricultural production;

• the supply of water to the municipalities of Bloemfontein, Kimberley, De Aar, Port Elizabeth, Uitenhage, and Cradock, and many small towns in the southern Orange Free State, north-western Cape, and eastern Cape regions;

• the generation of hydroelectric power from a total installed capacity of some 199.6MW, of which 35.4MW would be required to provide pumping to meet irrigation and municipal and industrial water requirements;

• flood control along the whole course of the Orange River downstream of the proposed Gariep Dam, reducing the occurrence of damaging floods by 50%, equivalent to a capital asset of R1 000 000;

• the creation of tourist and recreational facilities, especially at the two largest human-made reservoirs proposed in the scheme;

• the settlement of white South African families on 230 000 morgen of irrigable land and 600 coloured South African families on 4 000 morgen of irrigable land;

• the creation of an additional demand for farm labour of 40 000 units, involving a total population of 160 000 coloured South Africans;

• the stimulation of industrial and regional development in the form of agricultural, iron, steel, and water-intensive industries as well as communication facilities, schools, hospitals, and road and railway extensions.

Details of these and other predicted benefits, as they appeared in official documents of the time, are further elaborated in the various sections of Chapter 3.

In order to deliver these projected benefits, the comprehensive ORDP as outlined in the 1962/3 White Paper was to be developed in six phases over successive decades with the following components:

• a main storage dam at the Ruigte Valley to regulate the Orange River (first called the Ruigte Valley Dam, then the Hendrik Verwoerd Dam, and now the Gariep Dam);

• a high diversion dam at Van der Kloof to enable gravity command over the Van der Kloof and other areas in the Orange Free State and northern Cape (the P. K. Le Roux Dam or Van der Kloof Dam);

• the Van der Kloof Canals System, including a left bank canal and right bank canal as well as associated distribution canals and drainage systems, which would feed water by gravity and by pumping to areas in the Orange Free State and the Karoo;

• the Orange-Fish Tunnel, to divert water from the Gariep Dam to the north-eastern Cape;

• the Fish-Sundays Canals System to divert water from the Fish River into the Sundays River Valley;

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• the Conway Canal and Wapadsberg Tunnel to deliver water to the Fish River Catchment and Upper Sundays River Valley;

• the Hofmeyr Canal from the Orange-Fish Tunnel to serve 15 000 morgen extending as far as the Grass Ridge Dam;

• the Torquay Dam to be situated 25 miles upstream of the Orange-Vaal confluence and associated Torquay Canal System;

• various hydroelectric power stations, including one at Gariep Dam, one at Van der Kloof Dam, one at Torquay Dam, and one at the outlet of the Orange-Fish Tunnel.

Figure 2.1 gives an overview of the Orange River, Figure 2.2 shows the downstream irrigation areas and Figure 2.3 gives the detail of the transfer schemes to the Fish and Sundays rivers.

Primarily the objectives and components of the comprehensive ORDP detailed in the 1962/3 White Paper have determined the scope of this case study. However, a 1964/5 White Paper proposed a major change in the design of the scheme – the raising of the Gariep and Van der Kloof dams much earlier than was originally planned. Because this proposal was incorporated into the scheme prior to initiation of full-fledged implementation of the scheme, the scope of this study includes the objectives and components of both the 1962/3 and 1964/5 White Papers.

Notes

1 “World War II brought on a crisis in South African agriculture. The contradictions in labour tenancy, already apparent in the 1930s, were exacerbated by wartime demand for agricultural products and the accelerating flight of African labour to the cities. But European farmers responded to the crisis, as they had in the past, not by generalising market relations, but by insisting on even more elaborate state measures to control the African rural population” (Greenberg, 1980:85).

2 Within three years of the NP’s coming to power, the maize price increased by 50%, allowing the doubling of farm profits (Greenberg, 1980:89). As Greenberg (1980:53) has argued, “racial domination is rooted in the pre-capitalist countryside”. In other words, long before industrial and commercial capital demands control over labour and unions, farmers require their own forms of subordination of labour.

3 In the period leading up to the announcement of the Orange River project, a government commission had recommended that a proposed irrigation scheme in the Pongola Valley should be completed before embarking on the Orange River scheme. On its own admission, the government decided to ignore this advice and to undertake both schemes at the same time. In addition, the government decided to “think bigger in regard to the Orange River than had ever been done in the past” and “to look at the full possibilities of the Orange River”. In a lengthy address to parliament in March 1962, Verwoerd highlighted the “grand scale” of the Orange River project proposed by his government. This, he maintained, was “the image of a South Africa which is constantly growing. In the past 14 years we have actually brought into being a new State of which we can be proud, a country with a great future, a country which economically is as stable and as promising as it has hardly ever been before ...” (Hansard, 29 March 1962:3469).

4 Through the years, Afrikaner nationalism has evinced a strong attraction to the construction of massive monuments such as the Voortrekker Monument in Pretoria and the Afrikaans Language Monument in Paarl. During the budget debate of 1962, when the Orange River project was extensively discussed, the member of parliament for Kimberley North made explicit reference to the water scheme as a monument to nationalist rule. He maintained that although Verwoerd had been in office for only three and a half years, his government had already established three major monuments. These were the Republic of South Africa, the granting of self-government to the Transkei, and “the harnessing of the waters of the Orange River”. (Hansard, 28 March 1962:3392–3).

5 In the past, government contracts were extensively used to foster the growth of Afrikaner capital, and with the inclusion of a large number of South African (as well as foreign) firms in the project team, it is likely that this was also the case with the Orange River project.

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Figure 2.1: Location of Gariep and van der Kloof Dams in South Africa.

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Figure 2.2: Location of inter-basin transfer schemes to the Great Fish and Sundays River (Courtesy BKS).

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Figure 2.3: Location of Irrigation Areas along the Middle and Lower Orange River (Courtesy BKS)

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3. Projected and Actual Impacts of the Orange River Development Project

This chapter provides comparisons between the actual outcomes of the ORDP and those planned for or predicted. As will be seen, the 1962/3 White Paper was inadequate as a planning document. In addition, significant modifications to the project occurred as a result of the 1964/5 White Paper.

Consequently, it is useful to incorporate projections made in both White Papers in the evaluation of project performance. For the planned schedules, design characteristics, and project benefits the projections made in these White Papers are compared with the actual outcomes. For the analysis of project costs figures are taken from four White Papers (1962/3, 1964/5, 1974, and 1984/5) as these papers provide the only available estimates of actual costs, as well as projected costs. Additional outcomes that were not included in the original project documents are also identified as part of the analysis. Where relevant, baseline or pre-project contexts have been compared with post-project outcomes. The goal of this chapter is thus to determine, to the extent possible given its nature as a pilot study, the tangible effects and consequences of the scheme in a variety of areas.

This chapter is structured as follows: first the baseline pre-project, planned, or predicted information and targets will be provided, then the actual, including those unanticipated, outcomes are compared with these. Where relevant, the methods by which these findings were derived and the results of the comparisons are briefly explained. The findings and results from the various sections of this chapter are then integrated in the subsequent examination of the distributional effects of the ORDP offered in Chapter 4. Further examination of the projected, actual, and distributional objectives and outcomes of the scheme is provided in the subsequent chapters on the decision-making process and criteria and guidelines.

3.1 Time Schedules for Implementation

Table 3.1 provides a snapshot of the projected schedules for completion of the various components of the ORDP over its proposed six phases. Included in the table are the phases when the construction, installation, or extension of various components was to be completed as outlined in the 1962/3 and 1964/5 White Papers. Most of the major components were to be implemented in phases 1 and 2, although no firm dates were given as to when these phases would be completed in full. On the other hand, it was originally planned for critical design changes to components to be implemented in phases 1 and 2, as well as several additional components, to be completed in phases 3 to 6. The table also identifies those components to be initiated during one phase but only completed under another phase.

Components subsequently added to the scheme are provided at the end of the table.

In the pilot study, the actual dates of completion for only a limited number of components could be verified. These are reported in the table while further details of the changes in design of these components are identified in the next section. As can be seen from the table, the Gariep Dam and Power Station were completed virtually on schedule in 1971 and 1972 whereas the Van der Kloof Dam and Power Station were commissioned seven years later. The Van der Kloof Right Bank Canal was completed only in 1983 while the Left Bank Canal has been deferred indefinitely. The Orange- Fish Tunnel and the Fish-Sundays Canal, on the other hand, were operational as of 1975 and 1976.

Power stations originally planned besides Gariep and Van der Kloof have not been installed as far as is known based on the information available for this study. For example, the 1962/3 White Paper envisaged a hydroelectric station to be built by Eskom at Elizarand with a capacity of 4MW in the first phase and 8MW in the sixth phase. This was abandoned because later investigation found that it would be difficult to make available a suitable site for balancing storage upstream of Elizarand.