THE LAST WORD

Omicron, sabotage and 2021 impacted

A “Perfect Storm” is not an inappropriate description for the events that have taken place in the weeks prior to writing this article.

By Peter Bagshawe

Following the municipal election results and the establishment of committees, the effect of the changing political landscape was followed by the Rand dipping below R16/US$1; the South African Human Rights Commission hearing into the July insurrection, which revealed ineptitude; and the imposition of international travel restrictions following the identification of the Omicron Covid-19 variant locally, which has decimated the tourism industry’s bookings.

As an aside, the juxtaposition of the letters in the new variant’s name adequately describes the reaction of many to the travel restrictions internationally. Of equal concern are reports of alleged sabotage within the Eskom Group that have been linked to loadshedding, theft of spares from power stations and the acknowledgement of the impact of strong-arm tactics on the construction industry.

Turning away from the political side of the elections, the drop in the value of the Rand was exacerbated by the high pricing levels of Brent crude oil, with projections of R20 per litre for petrol in December being mooted. Given that this comes into effect at midnight on 30 November, the lead into the Festive Season will be tempered by increased costs of transport impacting on inflation and holiday plans at the end of a particularly hard year domestically. The festive season was viewed as a potential high point for the tourism and hospitality industries that have been hard hit over the past 20 months, with job losses and closures of businesses and hotels leading to extensive job losses within both industries as well as their associated supply chains. Data released on the evening of 28 November 2021, quoting the South African Tourism Services Association and the Federated Hospitality Association of South Africa, indicates that South Africa has lost in excess of R1 billion in bookings for the period December 2021 to March 2022 as a direct result of the international travel bans imposed on Southern Africa.

The Omicron variant was first identified in South Africa via the genomic sequencing work of local epidemiologists who reported this on 24 November 2021 to the World Health Organisation (WHO), which identified it as a variant of concern. Factually, however, Omicron is not a South African variant and the first case was identified on 9 November 2021. The World Health Organisation warned against the hasty imposition of travel restrictions and urged for a risk-based and scientific approach; this approach was soundly ignored internationally. From a local perspective, the current spike in new cases (2,858 reported on 28 November) is centred in Gauteng (81 percent of new cases) where some 70 percent of new cases are the Omicron variant.

Economically, loadshedding has continued to impact nationally on production and impair workflows. The recovery of the economy and Gross Domestic Product (GDP) in the short term is crucially linked to the stability of the electrical grid and power supply. Despite a gradual return to working from offices, with the substantial number of employees working from home, many of whom do not have access to reliable backup or power generation facilities, represents a loss to the economy every time the power grid becomes unstable. A multiplier on this is the increased cost of stabilisation to Eskom: estimates are that running the full fleet of 20 available open-cycle gas turbines costs in the order of R10 million per hour. Against this background, the reports of internal sabotage to Eskom’s generation capabilities are of immense concern, as are items such as the disappearance of spares valued at R1,3 billion from Tutuka Power Station. The likelihood of loss of power generation capacity due to internal actions has been supported by input from independent experts and Bureau of Economic Research. In a document released on 22 November, reference was made to the deliberate felling of a pylon which impacted on two coal conveyors, which could have caused the loss of generation at Lethabo Power Station. The stays on the pylon were cut with the apparent intention of causing the maximum impact to the power station and the grid for the least effort and exposure by the perpetrators to risk of discovery. Eskom Chief Executive Officer, Andre de Ruyter, has previously avoided direct reference to sabotage by employees and the pylon collapse incident is his first acknowledgement of this. The local media has referenced a 2020 report by security company Bizz Tracers, which alleged infrastructure sabotage by Eskom contractors and employees, portions of which relate to the sabotage of stations in order to earn overtime and supply spares and services at inflated costs. Eskom has instituted lifestyle audits of 383 executives and senior managers and their partners, with 34 high risk cases being referred to the Special Investigating Unit (SIU) for review and further action. Of itself, the perceived need for and conducting of the audits gives cause for concern and pause.

Pretoria Portland Cement’s recent announcements and 2021 half-year results point to a recovery of sales post hard lock down, with a substantial reduction in gross debt to R2,628 billion from the high in the previous year of R5,8 billion. This is an indicator that the construction industry has rebounded and should be contributing healthy results. Of concern are reports of activities of the so-called ‘construction mafia’. This grouping apparently demands a ‘protection fee’ from business owners or construction companies, typically 30 percent of the cost of an infrastructure project, or the employment of specific individuals on the construction site. If this demand is not complied with, the group retaliates by attacking the project, damaging the operations or intimidating staff. It appears that the groups are politically affiliated and may enjoy a measure of protection from prosecution, although court injunctions have, on occasions, been obtained to stop interference with project completion. Corruption at this level cannot be allowed to continue without concerted State action.

The Presidential address on Sunday evening 28 November did not impose further restrictions or increased levels of lockdown — however the Corona Command Council (CCC) will review infection levels and a further address is expected within the coming week. Levels of uncertainty are obviously high and outcomes are uncertain.

The release of suicide figures for Gauteng Province by the Member of the Executive Council for Community Safety is a stark reflection of the State of Emergency and the impact this and the Corona virus epidemic have had on society. In the 2019-2020 financial period, Gauteng recorded 1,325 suicides, an increase of 52,5 percent from the previous period’s 695 suicides. Apparent reasons given for the suicides include loss of income, financial difficulties, death of family members and domestic violence. Stresses and living in an artificial environment are taking a toll on society at large with economic pressures playing a large role in these. Arbitrary actions by foreign governments, corruption, loadshedding and economic uncertainty are realities that cannot be avoided but simultaneously require remediation. The ability of Government to react and remediate is essential — however the timeframe for these to be acted upon is rapidly contracting.

PETER BAGSHAWE holds a Bachelor of Law degree from the former University of Rhodesia and a Bachelor of Laws degree from the University of the Witwatersrand.