Thursday, 06 March 2008

Left In The Dark

RW Johnson, National Post
Published: Monday, March 03, 2008

In the last few days of January, South Africa's steadily escalating power crisis -- there have been increasing electricity outages nationwide for the last few years --finally came to a head when power cuts not only closed businesses and offices across the country but led to the complete closure of all the country's mines. Ever since the discovery of diamonds in 1867 and gold in 1886, this country's economy has been based first and foremost on its prodigious mineral wealth. Never, in all that time, had the mines had to shut for lack of power. Nothing could have brought home more starkly the crisis the country now faces. Eskom, the state electricity monopoly quickly announced that the country should not seek any new foreign investment projects till 2013 since there would be no power to run them. Foreign tourists were marooned on top of Table Mountain for a cold night because the cable cars lacked the power to get them back down. Business confidence plummeted. White emigration began to rise again sharply and everywhere one hears tales of capital flight. The Rand has fallen by over 14%.

Government ministers rushed to insist that the crisis would be managed, that there was no need to panic and the Minister for Energy even told Parliament that one solution would be for everyone to go to bed earlier. But economists hurriedly revised this year's growth rate down from 5% to 2% or less and Eskom warned everyone that even with power rationing there would be continued power cuts until at lest 2013.

Yet when the African National Congress (ANC) came to power in 1994 Eskom was the world's seventh-largest electricity utility, providing the world's cheapest electricity and with a 40% capacity reserve. The government treated cheap electricity almost as a human right and supplied it to many black areas that had never had it before. In 1998, an official white paper warned that new power stations needed to be built if there were not to be power cuts by 2007. The government not only ignored the warning but also imposed a formal ban on the building of new power stations for six years in order to encourage private power utilities to tender. Many came and looked, but realizing that they were expected to provide power at rock-bottom prices while giving away quite a bit of their equity in black empowerment deals not a single one tendered. Meanwhile, Eskom, under its new black management, got rid of large numbers of senior, skilled whites, brought in affirmative action replacements, saw standards of maintenance and technical competence plummet and then multiplied its problems by deciding to sell off its huge coal stockpiles and to privilege small black coal producers in future procurement. Thus, it emerged, when the mines were finally shut down Eskom was operating at 25% less than capacity because of coal shortages, the low quality of coal supplied and the fact that much of it was mere coal dust which, in rain, turned into incombustible mud.

The ANC's embarrassment is considerable for, despite all its avowals that it would not make the same mistakes seen elsewhere in independent Africa, it has done exactly that -- the failure of governance is huge, unmistakable, undeniable. There has been the usual desperate search to see how the crisis can somehow be blamed on apartheid, but the great unmentionable fact, present in every mind, is that under white rule there were no power cuts.

An even greater embarrassment now lies ahead. Last year the head of FIFA, soccer's international governing body, warned angrily that South Africa, which is slated to host the World Cup in 2010, had to strengthen its pitiful soccer team, since it was hard to imagine a successful tourney without a home team capable of keeping fans interested. But the power crisis throws even that in the shade. Can the new soccer stadia possibly be completed in time with the continual power cuts?

If the government were honest it would admit that it cannot promise to stage a decent World Cup in 2010 and ask that its hosting duties be postponed until 2014 or 2018 instead. Such a public confession of failure is, however, politically and psychologically impossible. After all, when South Africa was not awarded the 2006 World Cup, President Thabo Mbeki bitterly labelled it "the globalization of apartheid." Even now the government insists, as an article of faith, that 2010 will be a resounding success, "because all the stadiums will have back-up generators."

FIFA, we are told, is "closely monitoring" the situation, but it is now clear that if the World Cup is held in South Africa in 2010, it will occur in a country where most services work only spasmodically. Even now one faces non-working traffic lights, street lights, escalators, lifts, ATMs, shop and garage tills -- let alone lights, hot water and cooked meals -- on a daily basis. Moreover, Chevron has announced the shutting down of its refinery here since it cannot operate without a guaranteed and continuous power supply, and other continuous process industries are in the same plight.

The Cup will be held in the midst of South Africa's winter, when night temperatures in Johannesburg, Pretoria and Bloemfontein can all fall to near freezing. What is clear is that the government is constitutionally incapable of facing reality, so Sepp Blatter, the current head of FIFA will have to decide, whether to go ahead or move the tournament. Blatter owes his election as FIFA president to the African bloc, which elected him on a promise of bringing the World Cup to Africa, so he too has incentive to ignore reality. All things considered, then, a great ship is steering straight for the rocks with both the captain and the pilot insisting no danger lies ahead. The disaster which threatens deserves only one adjective: titanic. - RW Johnson is emeritus fellow of Magdalen College, Oxford, and Southern Africa correspondent for The Sunday Times.

No comments: