Blackout scam

Shaheed Mahomed

Shaheed Mahomed

The world economy is in a deep crisis. On a global scale few new industries are being developed.

As a sign of this decline in industry, last year in the United States alone, General Electric (GE) had 13 contracts for new coal power stations cancelled.

General Electric, the world's largest company in the field of power stations and the second biggest company in the world behind Exxon Mobil, has a crisis of falling profits and are desperate to find new fields to plunder.

The decline in the number of coal and nuclear power stations in Europe and the US has been coming on for years now.

Coal power adds to global warming and nuclear power produces dangerous waste that cannot be safely stored.

The main reason for the sustained blackouts are to provide justification for the accelerated mass privatisation of Eskom to General Electric and other related giant companies and banks. Irrespective of the impact, the ANC government has, for a few pennies for a section of the black middle class, tied the economy to General Electric for the next 20 years. General Electric, a US conglomerate, also deals with arms and directly benefited from the invasion of Iraq in 2003.

Up to 2001 the energy capacity in South Africa was growing steadily and reached 45000 megawatts.

Within a year, according to the US Energy Information Administration, the energy capacity of Eskom was reduced from 45000 megawatts to 40000 megawatts. In other words, some power stations were "mothballed" and taken off line. To immediately restore the capacity of 45000 megawatts the mothballed stations just need to be brought back on line. But for the time of year (summer) even the 40000 megawatts should have been more than adequate to deal with energy demands.

The policy around spare parts was changed, according to Solidarity Union. In the past, spare parts were kept on site. Now, the policy is not to keep any reserve parts but to order them when needed. This opens up the way for General Electric and other power companies to massively inflate prices when a crisis comes.

A R1million part can easily cost R5million to R10million. They can also delay the sending of parts, thus also contributing to a power crisis. This is why unplanned closures of power stations for maintenance will now occur more frequently.

Further, the supply of so-called wet coal by Anglo American's Exxaro was deliberately timed to coincide with the period of the planned sabotage by big capital of the electricity supply.

The coal mines are in a summer rainfall region, so why was the rain suddenly a problem?

Anglo American always supplies Eskom with the poorest quality coal (low heat, higher sulphur content), while reserving the best coal for Japan, Israel and other bastions of imperialism.

They could easily have supplied a smaller amount of high quality coal to Eskom if indeed there was a problem. They chose not to and are helping to prolong the power outages.

Who benefits from all this?

US consultancies ABB and Black and Veatch, and the US government provide a justification for the massive expenditure by "forecasting" that South Africa energy needs will grow by more than 1000 megawatts a year to 2025. They base themselves on the Gear and Asgisa targets of 6percent annual growth for the country.

The real growth is closer to 3percent, if that at all. The actual needs for electricity are much less than 1000 megawatts per annum. But even if they are true, then by 2015 an extra 7000 megawatts are needed. Bringing the existing spare capacity of 5000 megawatts back online means that only 2000 megawatts needs to be built up to 2015. Compare this to Eskom's plans:

l 4800 megawatts for the R70billion Medupi coal power station (Hitachi).

l 4000 megawatts for the close to R70billion Bravo coal power station (Hitachi).

l 3600 megawatts for the R70billion for the coal Mmamabula power station in Botswana (Coal Investment Corporation- co-chaired by ex-Eskom chief, Ruel Khoza).

l 1100 megawatts for the Durban and Port Elizabeth gas plants (American Energy Systems).

Thus 13500 megawatts in capacity to be built up to 2015 is seven times more than what is needed. State plans have now grown from the initial R80billion to a massive R300billion.

After 2015 the state plans to build another 20000 megawatts from nuclear power stations at a cost of R700billion. The estimated expenses for the power stations reach R1000billion (a trillion rand).

General Electric will benefit the most from the current crisis. Hitachi may be a nominally Japanese company, but General Electric has a cross ownership of the company. As Hitachi-GE is a world leader in nuclear power, it is likely that the bulk of the R700billion nuclear programme will be awarded to it too.

For a mere R6billion "enrichment stake" in the form of the ANC front company, Chancellor House, the bulk of the R1000 billion contracts will go to General Electric.

The ANC leadership is thus the local partner of US imperialist plunder of South Africa.

Anglo American also benefits from the power outages as it helps to create conditions to drive up mineral prices that they profiteer from. They also have the perfect excuse to retrench workers and cut their wage bill.

Anglo American, BHP Billiton and Xstrata are the gang members of the international coal cartel who will benefit from Africa being kept on coal power stations as long as possible.

Chase Manhattan and Citibank will also benefit as they are major shareholders of Hitachi, General Electric and Anglo American.

Chase Manhattan was part of the group of capitalists behind the 1973 coup against the Allende government in Chile.

l Shaheed Mahomed is secretary of the Workers International Vanguard League based in Salt River.