It was, however, the Lesotho Highlands Water Project (LHWP) which won the day for a number of reasons: the quality of the water was better as it had very little silt, no dissolved nutrients and was relatively unpolluted; it allowed for the generation of hydropower for Lesotho; and the estimated project costs were less than the OVTS alternative scheme. The project was originally envisaged to transfer 70 m3/s from the upper portions of the Lesotho Highlands into the Vaal River basin but only phase 1a and 1b have so far been completed. The Lesotho Highlands Water Project delivers water to South Africa via a transfer tunnel with its outlet in the upper reaches of the As River, a small tributary of the Vaal River near Clarens in the Free State.

The water is currently released directly into the As River, from where it flows via the As, Liebenbergsvlei and Wilge Rivers into the Vaal Dam. The flood attenuation properties of the dam were severely tested in February 1996 when the largest flood ever recorded at the Vaal Dam site was experienced. An inflow of over 4 700 m3/s was measured into the Vaal Dam which was already at full capacity due to previous good rains and it was only through good management by the Hydrology staff at DWAF that the maximum flood released from the dam was limited to 2 300m3/s. Flows above 2 300m3/s would have caused serious flooding and extensive damage downstream of Vaal Dam. The situation during the 1996 flood became extremely tense as the storage in the reservoir peaked at 118.5% of Full Supply Capacity on 19 February 1996.