The purpose of Lesotho Highlands Water Project is primarily to supply water from Lesotho to the Pretoria-Witwatersrand-Vereeniging industrial region of South Africa. In addition, the hydroelectric scheme at Muela will supply enough electrical power to meet the needs of Lesotho.

The project consists of a number of dams, reservoirs and tunnels, and a hydroelectric scheme which will be constructed in four phases. Construction operations, if the project runs to completion, will last until around 2020. Phase IA commenced in 1987 and consists of the Katse Dam, a Transfer Tunnel from the impounded reservoir to Muela hydroelectric power station, the Muela Dam, and a Delivery Tunnel from the latter dam to the outfall on the Ash River, which is part of the Vaal River system. The tunnels total some 81 km in length.

The Katse Dam and Transfer Tunnel are constructed in the basalts of the Drakensberg Formation. Many of these basalts have been subjected to deuteric alteration and consequently contain expansive clay minerals. Their presence can mean that the basalts disintegrate rapidly on exposure, which has led to increased excavation at the dam site, and slabbing and spalling from the perimeter of the tunnel. The Delivery Tunnel South was constructed in sandstones of the Clarens Formation. These sandstones presented few problems during excavation and this tunnel was bored 20 months ahead of schedule. It was anticipated that the Delivery Tunnel North would be the most difficult to excavate as it runs through a succession of mudstones and sandstones. Hence this tunnel is being excavated by a double-shielded tunnel boring machine which can bore through varied ground and provide protection against rock falls, while simultaneously installing precast lining segments.

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