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News Article : Mounting Concerns about Failure of Kariba Dam as El Nino Bites
Category: Short-Term Insurance : Risk Management
Author:Anne da Silva
Email:[email protected]
Posted:14 Jan 2016

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Region faces shutdown of hydro-electric plants and collapse of mining industry

Concerns regarding a catastrophic failure of the Kariba Dam have been thrust into the spotlight again as Zambia’s energy minister announced last week the possible shutdown of its hydroelectric plants with water levels in Kariba Dam dropping to below 14%.

Adding to concerns about Kariba dam, the Geological Survey Department director Chipilaika Mukofu said experts were still assessing the possible effect of a 4.6 magnitude earthquake on the Kariba Dam in Siavonga on 12 Jan 2016. 

In an interview, Mukofu said the quake’s epicentre was within sensitive reach of Lake Kariba and there was concern that the dam wall’s stability could be affected.

In a report released in September 2015 by Aon South Africa and the Institute of Risk Management (IRMSA), the risks and challenges for the region were detailed relating to the current state of the Kariba Dam and the proposed rehabilitation project.

The “Impact of the failure of the Kariba Dam” report was finalised in June 2015 and is sponsored by Aon South Africa and researched and written by Kay Darbourn. 

Now with the impact of severe drought brought about by El Nino and overuse of water for power generation, coupled with further project delays in critically needed rehabilitation work, the risks that could accelerate a failure of the dam may be increasing 

The Kariba Dam is in a dangerous state. Built on a seemingly solid bed of basalt in 1959, the torrents from the spillway have eroded the bedrock leaving a gaping crater, undercutting the dam’s foundations.

Engineers have been warning for some years now that without urgent repairs, the whole dam will collapse, knocking out Mozambique’s Cahora Bassa Dam and 40% of southern Africa’s hydroelectric capacity. Along with the devastation of wildlife in the valley, the lives of 3.5 million people are at risk.

According to Aon, the impact will span across the entire risk consequence spectrum, from significant loss of life, damage to property and the environment, to economic fall-out.

This risk and its potential consequences should be viewed as part of the existing power supply and demand challenges in the region and will require a strong commitment from governments, private companies and financiers to prevent the failure from happening.

“While water levels are dangerously low which takes some pressure off the failing construction of the dam for now, the bigger picture of the state of Kariba dam is critical." 

"Climate change, high rainfall patterns impacting future dam levels and water inflows from other regions, and potential seismic activity, could all contribute to the likelihood of failure of the Kariba Dam."

"In December 2014, the critical period was defined as “the next three years”, while the rehabilitation project is only due for completion in 2025,” explains Kay Darbourn, researcher and writer of the report.

On the flipside of Kariba’s pummelling water that has compromised its bedrock, current water levels continue to drop, and electricity supply within Zambia and Zimbabwe is already reduced by more than half. 

Mining companies have borne the brunt of having to import electricity supply at huge cost, triggering the closure of some mines and over 10 000 job losses.  Businesses and homes experience power cuts for up to 14 hours a day.

“But when water levels do improve and Kariba starts filling up again, there is no telling what the pressure could do to the retaining structures."

"The dependency of the region to Kariba Dam is massive, but while our original report focused on the failure of the dam, the impact of the drought shows similar consequences for  countries in the region,” adds Kay.

Some of the further risks noted since the release of the original report include:

Project Delay

• Feedback from the Zambezi River Authority (ZRA) in September 2015 confirmed that the procurement of the Supervision Consultant was being finalised and that this would be followed by a tendering process for the contractor that will carry out the Plunge Pool Rehabilitation works.

Thus far there have been no details of any tender or the work commencing on the floodgates.

• An ESIA report, which was one of the requirements before work could commence on the Kariba Dam wall, was published 10 November 2015 and notes that the Kariba Dam Emergency Preparedness Plan, completed in 2013, is still to be updated. 

This is an essential part of any disaster management operations if the dam fails before or during the project.

Climate Change, Drought or Flooding

• NewsDay Zimbabwe reported on 13 November 2015 that there was just 1% usable water left in Kariba.

Both Zambia and Zimbabwe rely heavily on power generation from Kariba, and both are experiencing severe power constraints impacting industry and the population.

• It was agreed that the ZRA will prepare a Climate Change Action Plan during Project Implementation that focuses on water management.

Monitoring and evaluation systems are an essential element of this strategy and would help the Zambezi River Basin communities and dam operators to understand clearly whether current water management practices are climate smart.

Funding and Debt Repayment

• While funding was secured in December 2014; delays, economic constraints and currency challenges will undoubtedly lead to an increase in the cost of the entire project.

“Whether you are a shareholder, stakeholder, board member, business executive, risk manager or even a private individual, if you live, work, own property or have investments in South Africa, Zambia, Zimbabwe, Botswana, Mozambique or Malawi, the chances are that if the Kariba Dam fails you will be affected."

"This will just be the start of years of economic, social, environmental, humanitarian and technological fallout that will devastate the region’s economies,” explains Kay.  

Some countries rely mainly on hydropower from the Zambezi and their economies will be severely impacted, both for industries that rely on electricity to operate and in terms of revenue generated from the sale of electricity. 

South Africa, already in a precarious energy supply shortage, will lose 1500MW of imported power as the Cahora Bassa Dam fails. 

Access to water for people in the Kariba and Cahora Bassa catchment areas for drinking, food and agriculture will be restricted. Transportation and access to the areas affected will be curtailed. 

New projects and investment in the region will be severely compromised, as the ongoing lack of electricity and water will make these uneconomical, potentially for up to eight years while the dams are rebuilt.  

According to Aon South Africa, leading risk advisors and insurance brokerage and sponsor of the “If Kariba Dam Fails” report, while we may know what the types of risks and challenges are that we will face in the event that Kariba Dam fails, the actual magnitude of many of these risks is unknown. 

Each new piece of crucial risk information presented in this report places business leaders and risk managers in a better position to mitigate and plan for such risks in an informed way.

We already know from Aon’s Global Risk Management Survey released earlier in 2015, and from IRMSA’s first edition of their South Africa Risk Report 2015, that the failure and shortage of critical infrastructure is amongst the top 10 South African risks identified by business leaders and risk managers. 

“By providing the information in this report, we hope to empower you to make the right decisions with regards to the risks you and your company may face." 

"Whilst we can debate whether the Kariba Dam will fail, why it might occur and when, there is no doubt that the impact across the region would be devastating,” concludes Kay.

Find out more in the report to be downloaded at http://www.aon.co.za/publications.aspx

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