State capture — it isn’t over. And you’re still paying

Fugitive from justice Ajay Gupta looked dapper in Dubai this week. He’s lost weight, and, in a light shirt and sunglasses, he looked almost carefree as he walked out of a business atrium and up to the waiting camera of South African Justin van Pletzen. Van Pletzen doorstepped the eldest Gupta brother and reported strategist for the family’s corruption network, reminding him that he was wanted back in South Africa. I don’t think we’ll see hide or hair of him unless the Emiratis can see some reason to assist South African law enforcement. Neither side seems in a great hurry to get the legal ball rolling. I wish they’d hurry up, though, as state capture is costing you and me a fortune, even though we live in a time of President Cyril Ramaphosa’s new dawn.

And Gupta is still benefiting richly. AmaBhungane, the investigative journalism hub, reported recently that the family and their lieutenant Salim Essa have started profiting from a kickback of R5.3-billion from China South Rail (now CRRC, the listed rolling stock manufacturer), from which they extracted a rent of about R10-million off every R50-million train supplied. If it sounds ridiculous, it is, and the Chinese rail company has promised to investigate.

China’s president, Xi Jinping, has implemented a take-no-prisoners anticorruption campaign called the Tiger and Flies programme, which has rattled party apparatchiks. What is striking, though, is that CRRC seems to export practices outlawed in China. We’ve seen the same with other multinationals ensnared in the Gupta-Essa net, like McKinsey,

KPMG, SAP and Bell Pottinger, all of which violated not only South

African laws but also stringent anticorruption and ethical codes in their home countries.

Transnet has not cancelled its contract with CRRC as far as has been reported, so you can assume the money is still flowing to the Guptas.

And so Ajay looks right as rain. The family have set up a comfortable bolt hole in Dubai, where they have reportedly tried to break into healthcare.

Another way you continue to pay for state capture is at Eskom, where graft-busting CEO Phakamani Hadebe, who has been brought in as a Mr Fix-It, is lobbying the regulator, Nersa, for higher tariffs from you and me. The previous corrupt regime at Eskom asked for 19.9% and was told to take a hike, but you can be sure Hadebe’s going to get a higher-than-inflation tariff increase because there’s simply no way to fund the utility via the national balance sheet. Last week, Business Times reported that Eskom is burning expensive diesel again because new power plants are not running efficiently. In its corrupt phase, middle management at Eskom was run down or marginalised by a corrupt leadership.

And we, the public, will pay for the diesel costs and new tariffs on top of increased taxes, both direct and indirect, announced in the budget in February. The VAT increase this week, as well as the hike in the fuel levy, are also, arguably, the cost of state capture. If the state’s contingent liability at Eskom was not as high as it is and if the South African Revenue Service had not been captured, these increases may not have been necessary. Here’s another way you pay. SAA was ruined when former president Jacob Zuma put his friend, crony and chairwoman of the Jacob Zuma Foundation, Dudu Myeni, in charge of the national airline. The hole in SAA’s finances is a hefty R5-billion, the feisty new CEO, Vuyani Jarana, told parliament last week. We pay for that through subsidies to SAA. It’s going to take Jarana five years to turn things around by executing a defensive, not a growth, strategy. He is scrapping routes left, right and centre. In other words, we’re paying much more for a much smaller national airline.

The crudest phase of state capture may be over, we pray, but we will be paying for a long time.

The VAT increase and the fuel levy hike are also, arguably, the cost of state capture