Wounded Nation

AFTER bathing in the warm, fuzzy glow of the Mandela years, South Africans today are deeply demoralised people. The lights are going out in homes, mines, factories and shopping malls as the national power authority, Eskom - suffering from mismanagement, lack of foresight, a failure to maintain power stations and a flight of skilled engineers to other countries - implements rolling power cuts that plunge towns and cities into daily chaos.

Major industrial projects are on hold. The only healthy enterprise now worth being involved in is the sale of small diesel generators to powerless households but even this business has run out of supplies and spare parts from China.

The currency, the rand, has entered freefall. Crime, much of it gratuitously violent, is rampant, and the national police chief faces trial for corruption and defeating the ends of justice as a result of his alleged deals with a local mafia kingpin and dealer in hard drugs.

Newly elected African National Congress (ANC) leader Jacob Zuma, the state president-in-waiting, narrowly escaped being jailed for raping an HIV-positive woman last year, and faces trial later this year for soliciting and accepting bribes in connection with South Africa's shady multi-billion-pound arms deal with British, German and French weapons manufacturers.

One local newspaper columnist suggests that Zuma has done for South Africa's international image what Borat has done for Kazakhstan. ANC leaders in 2008 still speak in the spiritually dead jargon they learned in exile in pre-1989 Moscow, East Berlin and Sofia while promiscuously embracing capitalist icons - Mercedes 4x4s, Hugo Boss suits, Bruno Magli shoes and Louis Vuitton bags which they swing, packed with money passed to them under countless tables - as they wing their way to their houses in the south of France.

It all adds up to a hydra-headed crisis of huge proportions - a perfect storm as the Rainbow Nation slides off the end of the rainbow and descends in the direction of the massed ranks of failed African states. Eskom has warned foreign investors with millions to sink into big industrial and mining projects: we don't want you here until at least 2013, when new power stations will be built.

In the first month of this year, the rand fell 12% against the world's major currencies and foreign investors sold off more than £600 million worth of South African stocks, the biggest sell-off for more than seven years.

"There will be further outflows this month, because there won't be any news that will convince investors the local growth picture is going to change for the better," said Rudi van der Merwe, a fund manager at South Africa's Standard Bank.

Commenting on the massive power cuts, Trevor Gaunt, professor of electrical engineering at the University of Cape Town, who warned the government eight years ago of the impending crisis, said: "The damage is huge, and now South Africa looks just like the rest of Africa. Maybe it will take 20 years to recover."

The power cuts have hit the country's platinum, gold, manganese and high-quality export coal mines particularly hard, with no production on some days and only 40% to 60% on others.

"The shutdown of the mining industry is an extraordinary, unprecedented event," said Anton Eberhard, a leading energy expert and professor of business studies at the University of Cape Town.

"That's a powerful message, massively damaging to South Africa's reputation for new investment. Our country was built on the mines."

To examine how the country, widely hailed as Africa's last best chance, arrived at this parlous state, the particular troubles engulfing the Scorpions (the popular name of the National Prosecuting Authority) offers a useful starting point.

The elite unit, modelled on America's FBI and operating in close co-operation with Britain's Serious Fraud Office (SFO), is one of the big successes of post-apartheid South Africa. An independent institution, separate from the slipshod South African Police Service, the Scorpions enjoy massive public support.

The unit's edict is to focus on people "who commit and profit from organised crime", and it has been hugely successful in carrying out its mandate. It has pursued and pinned down thousands of high-profile and complex networks of national and international corporate and public fraudsters.

Drug kingpins, smugglers and racketeers have felt the Scorpions' sting. A major gang that smuggle platinum, South Africa's biggest foreign exchange earner, to a corrupt English smelting plant has been bust as the result of a huge joint operation between the SFO and the Scorpions. But the Scorpions, whose top men were trained by Scotland Yard, have been too successful for their own good.

The ANC government never anticipated the crack crimebusters would take their constitutional independence seriously and investigate the top ranks of the former liberation movement itself.

The Scorpions have probed into, and successfully prosecuted, ANC MPs who falsified their parliamentary expenses. They secured a jail sentence for the ANC's chief whip, who took bribes from the German weapons manufacturer that sold frigates and submarines to the South African Defence Force. They sent to jail for 15 years a businessman who paid hundreds of bribes to then state vice-president Jacob Zuma in connection with the arms deal. Zuma was found by the judge to have a corrupt relationship with the businessman, and now the Scorpions have charged Zuma himself with fraud, corruption, tax evasion, racketeering and defeating the ends of justice. His trial will begin in August.

The Scorpions last month charged Jackie Selebi, the national police chief, a close friend of state president Thabo Mbeki, with corruption and defeating the ends of justice. Commissioner Selebi, who infamously called a white police sergeant a "f***ing chimpanzee" when she failed to recognise him during an unannounced visit to her Pretoria station, has stepped down pending his trial.

But now both wings of the venomously divided ANC - ANC-Mbeki and ANC-Zuma - want the Scorpions crushed, ideally by June this year. The message this will send to the outside world is that South Africa's rulers want only certain categories of crime investigated, while leaving government ministers and other politicians free to stuff their already heavily lined pockets.

No good reason for emasculating the Scorpions has been put forward. "That's because there isn't one," said Peter Bruce, editor of the influential Business Day, South Africa's equivalent of, and part-owned by, The Financial Times, in his weekly column.

"The Scorpions are being killed off because they investigate too much corruption that involves ANC leaders. It is as simple and ugly as that," he added.

The demise of the Scorpions can only exacerbate South Africa's out-of-control crime situation, ranked for its scale and violence only behind Colombia. Everyone has friends and acquaintances who have had guns held to their heads by gangsters, who also blow up ATM machines and hijack security trucks, sawing off their roofs to get at the cash.

In the past few days my next-door neighbour, John Matshikiza, a distinguished actor who trained at the Royal Shakespeare Company and is the son of the composer of the South African musical King Kong, had been violently attacked, and friends visiting from Zimbabwe had their car stolen outside my front window in broad daylight.

My friends flew home to Zimbabwe without their car and the tinned food supplies they had bought to help withstand their country's dire political and food crisis and 27,000% inflation. Matshikiza, a former member of the Glasgow Citizens Theatre company, was held up by three gunmen as he drove his car into his garage late at night. He gave them his car keys, wallet, cellphone and luxury watch and begged them not to harm his partner, who was inside the house.

As one gunman drove the car away, the other two beat Matshikiza unconscious with broken bottles, and now his head is so comprehensively stitched that it looks like a map of the London Underground.

These assaults were personal, but mild compared with much commonplace crime.

Last week, for example, 18-year-old Razelle Botha, who passed all her A-levels with marks of more than 90% and was about to train as a doctor, returned home with her father, Professor Willem Botha, founder of the geophysics department at the University of Pretoria, from buying pizzas for the family. Inside the house, armed gunmen confronted them. They shot Professor Botha in the leg and pumped bullets into Razelle.

One severed her spine. Now she is fighting for her life and will never walk again, and may never become a doctor. The gunmen stole a laptop computer and a camera.

Feeding the perfect storm are the two centres of ANC power in the country at the moment. On the one hand, there is the ANC in parliament, led by President Mbeki, who last Friday gave a state-of-the-nation address and apologised to the country for the power crisis.

Mbeki made only the briefest of mentions of the national Aids crisis, with more than six million people HIV-positive. He did not address the Scorpions crisis. The collapsing public hospital system, under his eccentric health minister Manto Tshabalala-Msimang, an alcoholic who recently jumped the public queue for a liver transplant, received no attention. And the name Jacob Zuma did not pass his lips.

Last December Mbeki and Zuma stood against each other for the leadership of the ANC at the party's five-yearly electoral congress. Mbeki, who cannot stand again as state president beyond next year's parliamentary and presidential elections, hoped to remain the power behind the throne of a new state president of his choosing.

Zuma, a Zulu populist with some 20 children by various wives and mistresses, hoped to prove that last year's rape case, and the trial he faces this year for corruption and other charges, were part of a plot by Mbeki to use state institutions to discredit him. Mbeki assumed that the notion of Zuma assuming next year the mantle worn by Nelson Mandela as South Africa's first black state president would be so appalling to delegates, a deeply sad and precipitous decline, that his own re-election as ANC leader was a shoo-in.

But Mbeki completely miscalculated his own unpopularity - his perceived arrogance, failure to solve health and crime problems, his failure to deliver to the poor - and he lost. Now Zuma insists that he is the leader of the country and ANC MPs in parliament must take its orders from him, while Mbeki soldiers on until next year as state president, ordering MPs to toe his line.

Greatly understated, it is a mess. Its scale will be dramatically illustrated if South Africa's hosting of the 2010 World Cup is withdrawn by Fifa, the world football body.

Already South African premier league football evening games are being played after midnight because power for floodlights cannot be guaranteed before that time. Justice Malala, one of the country's top newspaper columnists, has called on Fifa to end the agony quickly.

"I don't want South Africa to host the football World Cup because there is no culture of responsibility in this country," he wrote in Johannesburg's bestselling Sunday Times.

"The most outrageous behaviour and incompetence is glossed over. No-one is fired. I have had enough of this nonsense, of keeping quiet and ignoring the fact that the train is about to run us over.

"It is increasingly clear that our leaders are incapable of making a success of it. Scrap the thing and give it to Australia, Germany or whoever will spare us the ignominy of watching things fall apart here - football tourists being held up and shot, the lights going out, while our politicians tell us everything is all right."

11:50pm Saturday 9th February 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.

Power cuts enrage South Africans

Jan 16 2008 09:18 PM

Johannesburg - Power cuts are endangering motorists at traffic
intersections, inflicting heavy losses on businesses and infuriating
South Africans already disillusioned by leaders embroiled in
corruption cases.

State-owned utility Eskom is planning to spend R300bn to boost
power capacity in the continent's biggest economy over the next
five years but South Africans plagued by rolling blackouts are losing
patience.

The country's electricity reserves have been eroded by several
years of strong economic growth, a doubling of users and delayed
construction of power plants. Power cuts rippled across South Africa
a year ago, blacking out parts of major cities.

South Africa's power woes have raised political temperatures in the
past, with critics accusing the government of failing to address the
energy crunch plaguing Africa's biggest economy as it gears up to
host the soccer World Cup in 2010.

Economist Mike Schussler says South Africa has paid a heavy price
because of the outages. "We already think it's in the hundreds of
millions of rand," he said.

Eskom has now imposed new cuts, which have also affected the
crucial mining industry.

Eskom's spokesperson was not immediately available for comment.
But the outages were a hot topic on a radio talk show which asked
callers if South Africa had become a banana republic.

Bianca Uys, 33, is troubled in many ways. The manager of a pizza
restaurant has watched profits drop by about 50%. Driving home
alone at night can be dangerous for women during the best of times
- South Africa suffers from one of the world's worst rates of violent
crime, including rape.

Traffic intersections, known as robots, are pitch dark at night, with
no signals to guide helpless motorists. "It's not safe for a woman. I
get stuck at the robot," she said.

Frustrations were already widespread before the lights went off.

South Africans have just learned that prosecutors will charge their
national police chief, Jackie Selebi, with corruption, fraud, money
laundering and racketeering. Selebi has been given an extended
leave of absence.

Jacob Zuma, newly elected leader of the ruling African National
Congress, will go on trial in August on charges of corruption, fraud,
money laundering and racketeering.

"The general feeling is very negative. It's a cocktail of coverups
among leaders," Zaid Surtee, who owns an ice cream shop at the
posh Sandton City mall, told Reuters.

Every time his staff opens up the glass case covering fancy flavours
on offer, the ice cream goes soft and there is no chance of recovery
because of the cuts. "This is ridiculous. Nobody has any idea if
Eskom is doing anything about this."

Markets have factored in the allegations hovering around Zuma and
Selebi, as well as the power problems, said Esther Law, emerging
market strategist at Royal Bank of Scotland in London. "They are
adding to negative sentiment," she told Reuters.

The world's biggest miner BHP Billiton - South Africa's single largest
power consumer - said the cuts have hit its three massive
aluminium smelters.

"It does affect our production, but we normally don't disclose the
impact," BHP spokesperson Bronwyn Wilkinson said.

"All three of our smelters have been affected this week on a daily
basis, and they have been affected frequently since load shedding
began late last year."

Jewellry store owner Mohammed Ravat was more forthcoming
about his losses as his employees strained to work through
receipts under poor lighting.

"We can't go on like this. You need to look into the diamond clearly,
to show the customers," he said.