We expose the state’s R3200 Bn infrastructure scam. Let’s prepare the way for a General strike!

For years the world capitalist economy has been stagnating. Since 2007-8 crisis (which is still continuing), the capitalists have intensified their attacks on the masses of the world. Around the world the capitalists have come up with scams to exploit the masses more and to bail themselves out. In China, India, South Africa and many other countries, these scams are presented as ‘infrastructure projects’. 27th April (‘Freedom’ day) commemorates the continued freedom of Anglo American and other big capitalists to exploit the masses while we have gained only the right to make an ‘X’ every 5 years to choose which scoundrel will implement the plans of Anglo American. On Mayday the Cosatu leaders give a platform to the ANC and SACP, who support e-tolling, they want the labour laws weakened, they have reduced the taxes of big capital and increased the price of petrol, they are building a few brick shacks in the ghettoes and toilets in the veld; and here they are giving a bailout of R3204 000 000 000 (R3204 Billion) to Anglo American and other capitalists, being given respectability by the Cosatu leaders.


The myth of ‘there is no money’

In 2007 alone the big capitalists took out an extra R600Bn from South Africa through ‘transfer pricing’. This is when Anglo American and other big companies deliberately undervalue the goods they export- in this way they cut down on the taxes they pay and smuggle out massive wealth from the country. ‘Transfer pricing’ has been carried out by Anglo American and other big capitalists for years under the ‘apartheid’ regime and for years under the current regime. The Cosatu, SACP and ANC leaders all know about this, yet they sit with folded arms and allow this theft to happen. Cosatu’s Corruption Watch will not investigate it as it will only look into the petty theft by government officials, not the real corruption that is the basis of the capitalist system itself. Besides this wealth being smuggled out, hundreds of billions of Rands of wealth is taken by big capital out of the country every year. Currently the big companies take out over R1000 Bn every year.


Who will benefit from the projects?

R1945 Bn (61% of the R3204 bn) will go to electricity. Most of this will go to coal and nuclear power stations. China uses half the world’s coal every year, mostly for its power stations. Hundreds of thousands of the Chinese masses die every year from respiratory diseases due to the pollution from the coal power stations. Already, solar power stations cost less than coal power- and the cost of solar power is falling all the time. Also sunlight is free so there are virtually no fuel costs, once the stations are up and running. Who controls the coal mines? Anglo American.


The Fukushima nuclear disaster on 11th March 2011 involved 3 meltdowns of the nuclear cores. The entire area within 60km of the reactor has been evacuated. Those on the border of this region can only go outside their homes for 3 hours a day. The tens of thousands that have been evacuated will not be able to go back to their homes for the next 100 years. Only 2 of Japan’s 54 nuclear reactors are now open- the rest have been shut down. After the disaster Germany closed all the nuclear power stations. It will cost R3,5 trillion just to decontaminate the area around Fukushima, a process which will take 10 years, at least. The cost of nuclear power is prone to escalate- for example, the Vogtle nuclear reactors cost 13 more than their original budget. [we only have to think about how the Gautrain escalated from R5 bn to R30 bn in a short space of time]. The Dai-ichi reactors in Fukushima were built with US technology that their own designers knew to be defective. [We should not forget that since 1945 Japan is still under US military occupation]. Between 1979 and 2011 no new nuclear reactor has been built in the USA. Nuclear is 5 times more expensive than gas turbines. There is no safe mechanism for the spent fuel to be stored. The fuel cannot be re-used as they are more prone to accidents. The Hamaoka reactor, one of the safest in the world, with the thickest walls and extensive back-up systems, burst a pipe when shut down, spewing several tons of seawater into the active core. It has yet to be re-opened. Nuclear power takes 10 years to get into active grid and they cannot just be switched off- they need at least 10 years and hundreds of billions of Rands just for the decommissioning process. Now the government wants to build 6 more nuclear reactors in Cape Town. In the event of an accident, imagine, having to get 3 million people from the Metro area over the Sir Lowry’s pass and through the Hugenot tunnel! But who controls the Uranium supplies in South Africa? Anglo American.


The state has made nuclear power seem an option by massively increasing the electricity price over the past 3-4 years(Nuclear power is very expensive- 6 times the price of gas turbines). 75% of nuclear stations are capital costs which reflects that most of the equipment used will have to be imported and the cost of finance will be crippling, especially as SA has to pay much higher rate of interest than the imperialist countries. (the bank rate in SA is 9% while it is close to 0 in the USA).


Further, Eskom will only build 100MW of solar power; this is about 0.1% of the total required amount. The proposed 5000MW of solar power will be given to private companies to make profit from, but the building of the solar park in the North Cape will be funded by the state. The Inga 2 project from the DRC could yield 40 000MW, which raises the question, why is the state building expensive coal and nuclear that is not needed. Solar and hydropower could cover all the needs of the entire Africa. [The DRC hydroelectric plant could produce 200 000MW, enough to double the current electricity usage in the entire Africa. Solar power from the Sahara desert region could double even that]. A 24 square km area in the North Cape desert is enough for all SA.


There is no plan to meet the housing backlog of 2.1 million units. Instead only 2% of the infrastructure plans will go to ‘human settlement’. This plan is for a few thousand houses (19 000, some of which will be sold to the masses). The rest will go to upgrading 150 townships with swings, painting walls and seesaws. Shacks will be ‘upgraded’ so now workers will have high class toilets next to them or in the backyards. [we are not even sure if the toilets will be working as the state plans to ensure that water is costed on a profit basis- the price of water will also sky-rocket].


The power capacity will thus not be for households but mainly for industry. But  industry is in absolute decline, so why the need to more than double the power capacity (From the current 45 000 MW to 90 000 MW)?


Another R583 bn (almost 20% of the R3204 Bn) will go for transport; this is mostly for highways, rail and ports upgrades for minerals and freight and for new oil pipelines to make the more efficient plunder of the mineral wealth by Anglo American and other capitalists. This will also be for ‘Industrial Development zones’, IDZ’s, ie new slave areas where capitalists have less ‘red tape’ to worry about for them to exploit the masses. Have Cosatu leaders already struck a deal with their alliance partners to ‘relax’ labour laws?


Thus over 80% of the infrastructure plan is just to serve the interests of the capitalists.


The provision to train engineering students is a hoax, as there are already thousands of engineering graduates who cannot find jobs. The building of 2 universities and other small social projects are just a cover for the handing over of trillions of the wealth to Anglo American and other capitalists.


The working class will be made to pay

Despite Vavi saying that the funding should come from low interest bonds, the reality is that one way or another, the funds will come from the working class. This is why the Cosatu leaders claim that this year’s 16% increase in electricity is a ‘victory’- they know workers will pay for infrastructure that will serve the capitalists mainly. Anglo and others big capitalists pay 20 cents or less per unit of electricity while we pay over 5 times more. The working class is already subsidizing the electricity of the capitalist, now we must pay for the infrastructure that will be used by big capital to exploit us even further. And the electricity price will keep on increasing massively.


The annual interest payment on a R3204 Bn loan will be R288 bn. This is in addition to the R100Bn that the state already pays for its existing debt of R1000 Bn.


The state has already taken billions from workers pension monies to fund the e-tolling privatization of roads. They will take even more in future.


Workers will be forced to pay more tax; like in Greece, the government may increase VAT; the government will cut wages and pensions and they will cut on services. Under the disguise of building a handful of academic hospitals, the public health sector will be further collapsed. The real reason why public sector workers will receive low increases this year is that the state coffers are being plundered to bail out Anglo American, JP Morgan Chase and other capitalists. Current and future generations will be made to pay for bailing out the imperialist banks and Anglo American that control the entire economy.


In Greece, all government income from import export does not even come into the country; it goes into the private account of Goldman Sachs. The Lotto money has been seized by Goldman Sachs. Greek workers are now forced to retire later. Pensioners are committing suicide because they cannot survive- even the scraps from the dustbins are not enough to keep them going. The same is happening here. The government is unashamed to pay our pensioners R1200 per month while overlooking the stealing of billions by Anglo American. Services, like water and other basics will become ‘market-related’. In other words, even more, massive price increases are due- this is why the state is rushing to install pre-paid water meters.


Vavi argues that the government must set up state concrete, construction and steel companies, but Anglo American controls the concrete and iron-ore supplies. Any state company will be a total hostage of Anglo American. Vavi and co know this. They know that the infrastructure progamme is a scam to bail out Anglo American and big capital but they still argue that 


‘ the private sector can play an important role within the context of a state-led infrastructure construction programme.  For example, the skills that it contains can be used for national development effort.  This has been seen in the case of the rescue of Chilean miners who were trapped underground.  There is no reason why the private sector cannot contribute at a developmental price, to national effort to build say, dams, water canals, replace mud schools with good quality schools, etc’ [Vavi’s input to the Infrastructure April workshop]


But every day, workers still die in the Chilean mines, controlled by Anglo American. Workers still die every day in the mines across SA. The Cosatu leaders trust big capital with the safety of workers in an unsafe, expensive nuclear and coal scam. The Cosatu leaders help protect big capital by covering for the ANC-SACP government that builds so few ‘houses’ that the price of housing has gone up by 426% (more than 4 times) in the past 7-8 years, the highest in the world. The R78 Billion the state plans to spend on ‘human settlement’ is more than enough to wipe out the 2.1 million housing backlog if pricing was done at the real cost- but the state does costing at market rates and plans to build only 19000 housing units and build a few toilets in the veld.


The infrastructure scam in South Africa is similar to other scams which the imperialist World bank has forced on the masses in other parts of the world. A few weeks ago 50 people were killed on the Sarmiento line in Buenos Aires, Argentina, when a semi-privatized train crashed at the terminal station because the brakes failed. The trains have failed safety tests since 2002 but the state overlooked this and they kept on running. They even built double-decker trains to increase the number of passengers squeezed into the trains but they cut the monies to service the brakes. This is the type of future that the Cosatu leaders are taking the working class to.


This same infrastructure that will help to enslave us, the Cosatu leaders are saying we must protect- it is not enough for the Cosatu leaders that workers are being doomed to a life of eating out of the dustbins, they want us to become the security guards for Anglo American.


The way forward

The Cosatu leaders are giving legitimacy to the biggest plunder of the working class in history. This leadership has got to go. Further, workers need to discuss at grassroots level , in the workplaces and in the communities to break the alliance with the capitalist ANC and SACP. Any leader who still argues that Cosatu should remain in the alliance with the capitalist ANC-SACP government should be removed and replaced with an independent fighter. The time has come to build an independent, revolutionary working class party. Join the Workers International Vanguard Party, striving for the refounding of the Fourth International!


Draft demands and steps towards preparing for a General strike:

1.      Scrap all privatization of roads, end all concessions to private contractors, renationalize the roads under workers control- no compensation to the capitalists;

2.      Open the books of Anglo American and other big capitalists to a worker-controlled public audit;

3.      Expropriate all those capitalists guilty of ‘transfer-pricing’, without compensation to any capitalists, placing all the assets under workers’ control;

4.      Begin phasing out of all coal and nuclear power; towards 100% solar, hydro and wind power; no to bailout of Anglo American and other capitalists!

5.      nationalise all the land; expropriate all the cement and clay reserves from the hands of the capitalists; expropriate all the large capitalist construction companies and the banks, without compensation; for the creation of a single state bank and single state construction company, under workers control; This will remove the speculatively high price of housing; this will open the path to decent housing for all at low rental, with exemption for the low paid, the unemployed and pensioners, and the abolition of the segregated ghettoes;

6.      Expropriate all the commercial farms; For worker collectives to be set up; state assistance to all small farms and existing communal farms; expropriation of all the large food companies and retailers, under workers control; for a single national food distributor under workers control;

7.      Expropriate the entire transport industry without compensation to the capitalists, under workers control; for mass, safe public transport, under workers control;

8.      Expropriate under workers control, of all industries that retrench workers;

9.      share all work among all who can work, without loss of pay- reduce the working week;

10.  to prepare the way to a General strike we need to set up factory/strike committees (uniting worker delegates from all unions and non-unionised workers) at every workplace, mine and farm; in every community strike committees should be set up uniting employed workers, unemployed workers and the youth; The strike committees should set up committees of self-defence which should include delegates from rank and file soldiers [the history of 1985 to 1995 shows that Anglo American and other big capitalists will not hesitate to set up their own private armed groups to attack workers- no ruling class has ever given up power to the masses, without a fight]. We call for the working class in the USA and Europe to organise and rise up against your own regimes. For revolutionary working class parties across the world as part of refounding the Fourth International;

11.  all military bases of the US and French imperialists, out of Africa;

12.  Re-integration of Lesotho and Swaziland into South Africa, based on the right to self-determination;

13.  For a Federation of Socialist workers states of Southern Africa;

14.  For a Soviet Africa (based on workers councils).

This is the way to establish real freedom; to commemorate the real essence of Mayday. This is the way to globalise Tahrir square, the defence of Misrata, to internationalise Syntagma Square, to take the Occupy Wall street movement to its conclusion. Forward to Socialism!


27.04.2012 issued by Workers International Vanguard Party (formerly Workers International Vanguard League); 1st Floor, Community House, 41 Salt River rd, Salt River, 7925, ph 021 4476777; ph 0822020617, workersinternational@gmail.com ; website: www.workersinternational.org.za