The load-shedding scam 2023- analysis and plan of action

The central problem with electricity generation worldwide and in South Africa is the system of commodity production. This means that production is for exchange to gain profit and not centrally for social use.

From the beginning of Eskom it was set up to provide electricity for the mines which were, and up to now, controlled by international capital (imperialism). In the beginning it suited imperialism to have Eskom under state control so that the state could subsidize the production of electricity so as to reduce input costs for mining. This meant that from the beginning of Eskom it was the working class and the middle class that were subsidizing cheap electricity in South Africa. Eskom was nationalised under capitalist state control but not under workers’ control. This was not a uniquely South African phenomenon but a world strategy of imperialism capitalism.

However as the crisis of falling profits and stagnating development deepened in the 1970’s imperialism changed their strategy to begin to privatize state assets. [We argue that as soon as imperialism controlled the world since about 1900, there was a permanent decline of capitalism] Nationalised state assets were a trade-off by monopoly capitalism to grant concessions due to working class resistance. So certain democratic gains were won by the working class but the trade-off was that the capitalists would remain in control. In other words the commodity system would continue if certain democratic gains were conceded to the working class and middle class. The pace of privatization varied in each country depending on the strength of the working class and various factors needed by imperialism to remain in control.   

In South Africa, electricity was first rolled out to the mines and formal housing that was necessary for mining and agricultural extraction. The essence of Eskom remains the production of electricity to support the mines and the imperialist plunder of South Africa. The form of control was slave capitalism which meant that the vast majority of the working class was excluded from formal housing and thus also excluded from electricity.

One of the concessions of the 1994 transition to ‘free capitalist relations’ was that there would be free mass housing. However the agreement between the ANC, the NP (now the DA) and imperialism was that existing property relations would remain intact. It followed from this that the mass housing was to be in the apartheid ghettoes to the extent that a pool of reserve, cheap labour was required. Inherent in this was that mass shack dwellings would be a feature of post 1994 capitalist relations. Electricity would only be rolled out to the little that capitalism could get away with- until the revolutionary wave post-1985 had died down. The free water and electricity units to the masses after 1994 was a temporary gain necessary to calm the masses at the time. By 1996 the Mandela-unity government placed GEAR on the table. This was a structural adjustment programme of imperialism that continued the privatization process that the NP govt had started.

The 2007 world economic crisis and the consequences for the working class

Public (State) debt internationally rose from 70% of world GDP in 2007 to 124% in 2020. Over the same period, private debt, while quite high, only rose from 164% of GDP in 2007 to 178% by 2020. This shows that essentially the state coffers were used to bail out the banks from their crisis.

The Brazilian public debt rose from $306bn in 2002 to $1,5 trillion by 2018. This is an increase of 500% (5 times). From 2007 the debt of China rose from 150% of GDP to 300% by 2020. The debt of China doubled in this period while the debt of the Euro area and the USA rose from 220% to 300% of their GDP. Meanwhile the public debt of South Africa rose from 23% in 2008 to 71% by 2020, an increase of 300% or by three times.

The trend we can see from the above is that company debt rose very little despite being in crisis since 2007. The public debt increased massively which shows that the working class and lower middle class has been lumped with an increased burden and through the respective states are bailing out monopoly capital. This has brought increasing hardship on the masses and earlier deaths.

What are the main mechanisms through which imperialism increases its rate of exploitation in the colonies and neo-colonies?

There are a minimum of 3 methods:

a) currency manipulation and devaluation of the currencies in the semi colonies. Devaluation of the currencies in the semi colonies mean that in effect wages are cut as they are less in relation to the US dollar.

Let us say that your wage in 2007 was R10 000 per month. The exchange rate was R7.05 to the USD. Assume that you received an annual increase of 6% per annum. By 2023 your monthly wage would have been R25 403. The exchange rate is R18,22 to the USD in April 2023. In dollar terms your wage would have been $1418 in 2007 and only $1394 by 2023. A decrease in real terms since 2007. Thus the wages were decreasing in dollar terms and the profits have been increasing, through nothing else than currency manipulation. The imperialist banks that have cross ownership of the mines are making massive profits through currency manipulation. Wages would have fallen by a factor of 2,58 since 2007 just through currency manipulation.

Any loans that the state has in dollar terms would have to be repaid at 2.58 times its Rand value. Currency manipulation helps keep a colony or semi-colony like SA in permanent debt.   

b) different rate of interests- loans made in the Euro area and the USA carry interest rates of 3% or less while loans made by the semi-colonies carries 8% or higher rate of interest. Thus there is greater exploitation by imperialism in the semi-colonies;

c) through mass scams and corruption imperialism dumps semicolonies in large-scale debt that they will never be able to pay off.

All 3 these mechanisms were at play in the massive Eskom debt, an artificial crisis that imperialism has created and benefits from, on a systemic basis.

We now delve into the Eskom crisis itself:

The Eskom and loadshedding scam

The 18^th April 2023 article in Biznews on the ‘big lie’ about power breakdowns is very revealing. They show that coal power stations in the US built in the 1980’s of similar age to the ones shut by Eskom, to have a high energy availability (over 80%) and actually , with the latest technology are even more efficient than when they started. [see graph in Biznews 18 April 2023 article in references below]

  Another chart in the same article shows that there is no correlation between age of coal power station and its efficiency. Many of the older stations are more efficient than the later ones- this means that age of the station is not a factor in breakdowns at power stations. There is also technology which reduces emissions from coal to close to zero- an adequate interim measure until renewable energy stations can be built up

(Biznews, 2023)

Thus there was no reason at all for the coal power stations to have been shut in SA.

Eskom closed 4000MW of coal power capacity in 2007 which they should not have done. In addition, our 2008 article (see the link at the end of this article) demonstrates that there was the potential of 10 000 MW from wave power from SA’s long coast line; there was hydro capacity of 200 000 MW from the DRC and there was more capacity available from wind and solar power. In other words there was no need to have the Medupi and Kusile projects. With delays the total cost of Medupi and Kusile is over R400bn. A totally unnecessary expense. The UCT school of Business played a major role in ‘justifying’ the coal build programme. So too should the IMF and World Bank who had a hand in funding and encouraging the dud Medupi and Kusile project. They should be held to account!  [There is a long history of the international agencies launching projects that bail out monopoly capital and that deliberately enslave entire countries. The entire masses are being held hostage by the imperialist agencies and their henchmen and hitmen].   

The total debt of Eskom by 2019 was R605bn of which over R440bn is to the major banks. In other words most of this debt was artificial and created through a scam by world imperialism. By contrast the debt of residents in SA to Eskom was a tiny R40bn. This shows that the masses are not to blame for loadshedding or losses to Eskom. In fact Eskom could easily write off this debt. The emphasis by the govt on the debt by municipalities shows how much the govt is a tool of imperialism and shows their anti-worker nature.

The massive design flaws inherent in Medupi and Kusile mean that they are designed to fail and be a permanent state of repair and constantly in need of extra funding. The only ones who benefit here are the imperialist banks who are constantly dishing out loans at high rates of interest. There was also the case of over 20 000 defective welds in the boilers at Medupi and Kusile. From an engineering perspective it is not possible to have 20 000 defective welds as the process is supposed to be randomly checked as the build is happening. This shows that the design flaws were deliberate. Just the annual interest on the R440 bn debt to the international banks is R35 bn. By Eskom’s own figures, their income and expenses since 2007 have balanced- yet there is an extra R440 bn in debt created, out of nothing- out of a scam build programme for Medupi and Kusile! This R440 bn was grabbed by the international banks and on top of it they get annual interest of R35bn. This is nothing but a bail out of the international banks at workers expense!

The Medupi and Kusile projects have been shown to be a scam- a means to deliberately increase the public debt of the masses in SA. This is one of the mechanisms to bail out the international banks from their crisis. That the scam began in 2007 is no accident- this is how the international banks are getting out of their crisis- through scams in the semi-colonies.

The ANC received R6bn through its investment company, Chancellor House, to be part of the multi-billion Rand scam of imperialism through the Kusile and Medupi coal build project, to fleece the masses.

The ANC and DA are part of the plan for permanent loadshedding and fleecing of the masses.

The masses had to pay 14,98 cents per Kwh in 2007. Today we are forced to pay R2,28. This is an increase of 15 X over the past 16 years and there is no end in sight. Imperialism wants to squeeze the masses even more. Permanent loadshedding has become a multi-trillion Rand business through generators and solar panels etc.

In 1994 the ANC, NP and DP (DA) agreed to a capitalist solution that left the wealth in the hands of those who had it (the monopoly capitalist class) and that so-called redistribution would only take place from ‘new growth’. The stagnation of the world economy meant that the ‘new’ business was only through privatization of state assets. Thus the black middle class and aspirant capitalist class was and is keen to promote privatization of state assets as a junior partner to imperialism. Eskom and other state assets are workers’ money- yet the govt deliberately runs it down and wants to sell it off for a song.

The bourgeoisie media and judiciary are complicit in the scam by concentrating on the couple of billion pilfered by black capitalist and diverting the attention from the hundreds of billions being stolen by imperialism. The state even spent over R1bn on the Zondo commission to focus on a couple of billion stolen by some of the black capitalist class while absolving imperialism. The state capture by imperialism is normalised and without question. ‘Anti-Corruption’ takes on a new meaning. It is a means by which imperialism disciplines the local capitalist class to not steal too much- to ensure that the lion’s share is always taken by international monopoly capital.

Why did imperialism and local capital opt for the dud coal build ? The dud coal projects of Medupi and Kusile require a constant input of the commodity coal, which offers a permanent cash cow for imperialism. [Exxaro already has a 40 year contract to supply Kusile and Medupi] .Wave power, wind and sunlight are free and always available- therefore they do not offer the capitalist class any means to make profit. That is why wind, wave and solar has been neglected even though they offer clean energy. Imperialism is only pushing solar where it can turn components into commodities- that is why they promote individualised inverters and solar panels that produce miniscule power and still leave the masses at the mercy of imperialism and their god of profits.

How the masses subsidize big capital.

In our 2008 article on the electricity scam we demonstrate how the masses subsidize big capital. Imperialism signed 20 year contracts to keep their prices low so they are exempt from the increases that the masses have been facing. They are also profiteering from the extra hundreds of billions the masses are paying into the bottomless pit of Eskom debt. Arch opportunists, the imperialists are taking advantage of the weakness of working class organization to extract as much profit as possible. It is likely that imperialism still pays 12 cents per Kwh while the masses are forced to cough up R2,28. This is one of the ways that the masses continue to subsidize monopoly capital. This is what we wrote in 2008:

‘It costs Eskom 16 cents per KiloWatt Hour (KWh) to produce electricity. It charges industry only 16 cents per KWh while the general public has to pay 44 cents per KWh. Large customers of Eskom like BHP Billiton, pays even less, about 12 cents per KWh. This means that the working and lower middle class are subsidizing the electricity cost of big capital. Residential use of electricity is only 19%, while industry uses about 80% of the overall total. But in terms of cost, residential users pay 43% while industry pays only 57%’.

The energy usage in SA have remained steady over the past 20 years so there can be no argument of a lack of capacity. In 2022 Eskom had a capacity of 54 GWh (Giga watt hours) with an annual system load of 113 TWh (Tera watt hours).

Biz news places the blame on the breakdowns of the power stations and loadshedding at corruption, mismanagement and sabotage. From the facts presented above, the central cause of loadshedding is sabotage by imperialism though a dud project of Medupi and Kusile and all the related costs around it. In addition the multiple breakdowns at other power stations and the deliberate closure of others is only benefitting the capitalist sharks who make a huge profit from systemic loadshedding. Systemic loadshedding has become big business, a means to force the rapid privatization of Eskom and the trillions that the masses have invested over the years. Those who profit from the privatization should be fully investigated. Deployment of the army to the power stations is a diversion. The very government and its backers are benefitting from loadshedding. The government policies and actions have caused the crisis in electricity provision. Quite simply, to solve the electricity crisis, the govt must be removed from power.  

What follows from the above is that the diesel and open gas turbine projects as well as the pending gas power ships are all self-enrichment scams to fleece the working class. If Eskom had completed all the pumped storage facilities that were feasible then it would not have been necessary for the diesel and open gas turbine projects that are not only very expensive but are continuous cash cows for imperialism and some of the black capitalists. Suddenly the govt wants to reopen some of the power stations but want to privatize them. This shows that the agenda all along was to profit from the crisis.

Despite all the noise by the bourgeois media and government over renewable energy, Concentrated solar power only makes up 0,5 GW out of a total of 54GW of the electricity capacity in the country. This is less than 1%. This further illustrates that there is no intention by government to break free from coal and from commodity electricity production.

The ANC, DA governments are in partnership with imperialism for the total economic plunder of the masses and future generations. They must be stopped.

The masses in South Africa have fallen victim to a classic Economic hitman project by imperialism.

The leadership of the masses are compromised. 

The scale of the attack on the masses is due largely to the fact that the working class leadership are in the pockets of imperialism. The SACP has an investment company that has shares in mining. Many of the SACP leaders have acted as ministers in the very ANC government that is leading the attack on the masses. The leadership of Numsa are compromised through their links to their own investment company and through various ways have failed to lead the defence of the masses- they concentrate on purely economic issues and have failed to lead the masses politically in combat against the attacks of the capitalist and imperialist class. The latest article by the Numsa General Secretary on Eskom (Public Ownership of the electricity system must be defended- Mail and Guardian 5^th May 2023) rings hollow. Once again he offers no programme of mass action for the working class to end the crisis once and for all. The central thrust of his article is to support the Electricity Minister, except on one point. He even proposed gas and nuclear power as alternatives.

The gas powerships will all be on the coast next to cities. Even though their emissions are half that of coal they are still toxic and likely to result in increased numbers of respiratory disease and cancer.

A recentt study was done on over 100 nuclear power stations in the USA. There was an average cost overrun of 241% and several years delay in completion. In addition, science has not solved the problem of safe storage of the waste which will remain toxic for thousands of years. After the Fukushima disaster in Japan there was an expense of over R3 trillion and the area is still not safe. Yet our Mr Jim thinks that gas and nuclear is the way to go. It is likely that, with all fractions of capital vying for profit from nuclear power the cost overrun will be so huge that makes the Medupi/Kusile overrun of R400bn look cheap. Mr Jim wants to sell our youth and future generations into total slavery to the imperialists. No wonder the imperialists are accelerating the attacks on the masses, the Numsa leadership is totally compromised and not interested in class struggle nor interested in defending working class interests. The recent expulsion of the Saftu President, cde Ruth Ntolokose, from Numsa, not only weakens Saftu but the entire working class movement.

The way forward

A brief reflection on 50 years since the historic 1973 Durban strikes

The 1973 Durban strikes sparked the rebirth of the workers movement in South Africa. It also marked the rebirth of workers’ political organization. The Black Consciousness movement arose. In the USA there had been the widespread anti-segregation movement and the Black Panthers. 1973 also marked the defeat of US imperialism in Vietnam. 1968 also marked the uprising in France that shook the state to its core. The Algerian war from 1958 to 1962 also provided inspiration. The SACP and ANC found resonance among the masses. There were a number of independent Trotskyist groups that were formed. While the trade union movement was being forged anew, the leading activists that led this organizational trend were the various strands of Socialists and Communists.

The decision by the SACP to rebuild the ANC proved a key error in the Marxist movement. Imperialism poured millions into the building of the UDF knowing full well that its programme was capitalist and that it would act as a brake on the revolutionary movement. The SACP followed the stalinist line that workers in a semi-colony should not strive to take power in its own name but that it was necessary for a national liberation movement to take power and the struggle for Socialism was postponed indefinitely. Thus the programme of imperialism and the SACP coincided in its essence. The line of the SACP was for capitalist relations to remain intact.

Post 1994 the SACP provided Minister after Minister who kept on reminding the working class that nationalization of the mines and banks was not on the agenda.

There have been many revolutionary moments : 1976, 1980, the 1984-1993 uprising, the start of the 2000’s when social movements arose; the Marikana uprising of 2012-2013, the farmworkers’ strikes of 2013; the #feesmustfall and fallist movements of 2015 onwards; the July days of 2021 and the current simmering 2023 ‘cost of living’ uprising.

The bourgeois economists are so brazen in their predictions: They say that there will be a stormy revolt but no danger of revolution. They realize that the left is in total disarray.

Big capital has invested millions and billions in promotion of ideology that politically disarm the working class. The capitalists have think tanks; they have their own parties; they have international institutions and international armed units; they have their mercenary forces. Yet many on the left actively promote that workers do not need to have their own party. And when they actually adopt a stance to build a party it is around the leaders of the labour aristocracy who are intertwined with union investment companies. In 1993 Numsa workers already adopted a resolution calling for the break of the alliance with the capitalist ANC and for a new workers party (it was implied in this resolution that this party would not be the SACP- for good reason too). In 2012 the Sociology of Work Programme (SWOP) did a survey of the shopstewards in Cosatu and found that 60% of them favoured the development of a new workers party, in essence breaking from the ANC and SACP. The 2102 Cosatu Congress suppressed this document. The 2013 Numsa Special Congress called for the formation of a new workers party. The contents of the resolution deserves a futher study. Suffice to say that despite the fact that the left were suppressed in the discussions, the workers wanted their own party and wanted a decisive break from the ANC and SACP. Earlier in 2023 the Sadtu court interdict papers reveal the voting trend at the 2022 Cosatu Congress. It showed that all the industrial affiliates voted to break the alliance with the ANC. Sactwu, NUM, Satawu, Ceppawu all voted to break from the ANC. This is a reflection that the industrial working class have broken from the ANC. The fact that NUM (the mineworkers union) was among those that voted for a break from the ANC shows that even the rural workers have broken from the ANC. The SACP has its base among the labour aristocracy, the fulltime shopsteward and officials layer in the unions and thus they have managed for now to direct the workers support to the SACP instead of the ANC. However the programme of the SACP is still capitalist; they hope by presenting a left face that workers will still support them and remain chained to capitalism. All the above still shows that the working class want its own workers party. It realizes that without its own party no political struggle for workers power is possible. This is a positive trend in the working class movement.

It is high time to draw the lessons of 1973 and other uprisings. Let us build a revolutionary workers party anew. The Bolshevik party started with a handful of activists who first clarified their programme and then built their party. We are at that moment once again. We call for Socialist revolutionaries to forge a common programme and to build a new workers’ party. Let us pool our experiences and build a fighting organization of the working class. Let us also form a united front in struggle on the current practical and theoretical issues facing the working class. We offer the programme below as a concrete proposal for an immediate programme of action on the loadshedding and cost of living crisis:

Immediate steps

1. Form workers power committees in every factory, mine, farm, street and block;  Workers defence committees at every power station ,with worker control committees to root out all corrupt officials/managers involved in sabotage of electricity.
2. Marches and occupations of government facilities to demand an immediate end to loadshedding and an end to high electricity, food and transport prices;
3. End the subsidy to the bosses; they must pay the same rates as residents
4. Reduce the price of electricity to affordable levels;
5. Scrap the municipal debt immediately (this follows from the principle of social solidarity). 100 free units per household.
6. Scrap the debt arising from Medupi and Kusile and hold all the contractors and banks responsible for this dud project, including the IMF and World Bank.
7. Immediate building of large scale concentrated solar power, wave, wind and hydropower under state and workers’ control
8. Research into the large scale use of nano materials for thin film production for solar power capture and use
9. Immediate steps to work towards the phasing out of coal power as the steps to renewable energy advances; immediate expropriation without compensation of all coal mines and all mines related to energy production and storage and placing them under workers control. Expropriation of all banking assets of the imperialists that have benefitted from the collapse of Eskom and who are making profits from the Eskom loans.
10. District and regional conferences, leading up to a national conference on a plan to seize all means of production related to power production and to place them under workers control. The delegates should be subject to instant recall and any officials appointed should not earn more than the average wage of a skilled worker.
11. All power to the working class.

Workers International Vanguard League 41 Salt River rd, Salt River, 7925.

Email This email address is being protected from spambots. You need JavaScript enabled to view it. website www.workersinternational.org.za 

References:

https://www.biznews.com/sarenewal/2023/04/18/eskom-big-lie-mismanagement [Eskom deliberately closed power stations that would deliver high energy availability].

http://workersinternational.org.za/workersold/blackout%20scam-who%20pays.inlversion8.03.08.htm [ our 2008 analysis where we expose the coal-build plan and the massive subsidy the capitalists receive; we showed then that no blackouts/loadshedding was necessary]

https://www.researchgate.net/publication/318599488_The_Wave_Power_Potential_of_South_Africa [ 56 000MW potential power from waves -with between 8-10 GWh potential energy contribution]

https://www.eia.gov/energyexplained/hydropower/wave-power.php [64% of the energy needs of the USA could be supplied from wave power]

https://www.researchgate.net/publication/305126646_Cost_Analysis_of_Wave_Energy_in_the_Pacific [wave power could cost R30 bn for just 100 Pelamis wave energy converters and produce 120 GWh per annum; each device could last a minimum of 25 years].

https://en.wikipedia.org/wiki/Penzhin_Tidal_Power_Plant_Project [87 GW and 200 TW annual - 2x Eskom in one wave power plant in Russia]

https://www.power-technology.com/features/tidal-energy-cost/ [cost of wave energy once installed is 40 cents per Kwh. This is 6 times cheaper than current eskom rates].

https://www.eia.gov/energyexplained/coal/coal-and-the-environment.php [emissions from coal mining and use can be reduced]

https://www.csir.co.za/documents/statistics-utility-scale-power-generation-south-africa2022h1pdf [Concentrated solar power is less than 1% of energy capacity showing government has no intention of developing renewable energy on any large scale]

https://www.imf.org/en/Blogs/Articles/2021/12/15/blog-global-debt-reaches-a-record-226-trillion   [The trend in world debt: public debt was 70% of world GDP in 2007 but rose to 124% of GDP by 2020]

https://www.ceicdata.com/en/indicator/south-africa/government-debt--of-nominal-gdp [SA debt rose from 23% of GDP in 2008 to 71% of GDP in 2020. This is an increase of 300%, or three times].

https://businesstech.co.za/news/finance/332227/eskoms-20-year-road-to-financial-crisis-in-a-nutshell/ [Eskom debt by 2019 is R605 bn- most of which is from Medupi and Kusile- R500bn]

https://www.engineeringnews.co.za/article/technical-defects-at-medupi-and-kusile-resulting-serious-underperformance-2019-02-01-1/rep_id:4136 [Medupi and Kusile have inherent design flaws that will always compromise it. The project was designed to fail and be a constant cash cow for the international banks].

https://www.biznews.com/thought-leaders/2021/03/17/eskom-medupi-kusile-yelland [Medupi and Kusile were designed to fail and be a permanent cash cow for imperialism]

https://mybroadband.co.za/news/energy/340283-massive-design-flaw-at-eskoms-biggest-power-stations-what-went-wrong.html 

https://bkconnection.com/books/title/the-new-confessions-of-an-economic-hit-man [some reading on Economic Hitmen and how countries are deliberately put in debt]

https://www.sec.gov/news/press-release/2022-214 [Swiss multinational ABB fined R8bn by US SEC for corruption in SA around Kusile contracts- the entire project was inherently corrupt and the international banks who benefited hundreds of billions were left untouched].

https://www.hydroreview.com/world-regions/eskom-board-approves-south-africas-1500-mw-project-lima/ [Eskom failed to complete a number of pumped storage projects that could have been enough to do away with the diesel and open gas turbines]

https://mg.co.za/article/2012-10-12-00-locals-left-out-of-sacp-mine-venture/ [SACP is involved in mining partnership with capital. ]

https://mg.co.za/article/2012-05-18-all-aboard-the-gautrain-comrades/ [Sacp and former Cosatu leader Jay Naidoo, benefited from the Gautrain project]

https://www.sciencedirect.com/science/article/abs/pii/S0925838822042906 [efficient nano materials for solar harvesting, with wide applications]

https://environment-review.yale.edu/true-long-term-cost-nuclear-power [ Nuclear power cost is huge because its waste is active and harmful for thousands of years and no country has solved the problem of safe storage of waste. There is also the danger of nuclear accidents].

https://www.economist.com/briefing/2012/03/10/the-death-of-trust [just one nuclear accident cost $175 bn  (R3 trillion) and it is still not resolved, many years later]

 https://www.cell.com/joule/fulltext/S2542-4351(20)30458-X?_returnURL=https%3A%2F%2Flinkinghub.elsevier.com%2Fretrieve%2Fpii%2FS254243512030458X%3Fshowall%3Dtrue [Cost of nuclear power in the USA was 241% over budget and often delayed completion of several years. In South Africa the cost overrun will likely be more, with different fractions of capital vying to make a profit].

Ends/…………..