At the epicenter of the world’s most lethal pandemic, South Africa’s hottest new business is hustling for corpses. President Thabo Mbeki may want to deny the extent of the AIDS crisis in his country–he has questioned even whether HIV causes the disease. But it is getting increasingly difficult for Mbeki to avert his face from the social turmoil that the AIDS epidemic is causing. So fast are AIDS victims piling up that often-unscrupulous entrepreneurs are offering cut-rate funerals faster than the government can keep tabs on them. The explosive growth of unlicensed undertakers is engendering a health hazard in the eastern province of KwaZulu-Natal, where the AIDS epidemic is most advanced. In Durban, the provincial capital, authorities battle to dispose of unclaimed bodies.

Morgues and cemeteries are out of space. A lively black market has grown up in stolen burial equipment. Crooked morgue workers sell corpses to favored undertakers, or to the highest bidder, sometimes even before bereaved families arrive to claim a body–leaving the relatives no choice but to pay the undertaker who collected the remains. Rival hearse drivers carry pistols and exchange death threats. Most ominous of all, government hospitals are being left with more and more unclaimed bodies–mostly AIDS victims–to bury at unbudgeted public expense. Undertakers who bid for this work can be tempted to cut corners by mishandling bodies. This growing demand for mandatory “pauper burials” has already led to scandal: bodies allegedly dumped in mass graves or left unburied in mortuaries for months at a time. “The numbers are increasing unbelievably,” says Gayle O’Connor, a Durban environmental-health officer. “It’s going to be a massive problem.”

The country’s racial history complicates enforcement. Most Durban undertakers are white or Indian; the majority of the AIDS victims are black. The established undertakers complain that the city health department refuses to crack down on the mainly black newcomers to the trade on grounds that the blacks were “previously disadvantaged”–barred from working freely until apartheid was abolished in 1994. “I’m not trying to oppress anybody,” says Harris Peters, one of the city’s largest funeral operators, who complains that six of his ex-pensive coffin-lowering machines have recently been stolen from gravesides. “The newcomers should simply have to meet the same standards we did.” But Richard Tembambatha, who has organized a new advocacy group called the Black Funeral Undertakers Association, cries racism. Blacks today freely operate other small businesses, such as street stands, without licenses, he says: “We now have black empowerment.” The U.N. World Conference Against Racism, which took place in Durban earlier this month, did not address this issue.

The newcomers claim they’re running no health risks. They say they simply subcontract for the specialized services of established morticians. That means a licensed undertaker washes and dresses a body and keeps it stored in an approved refrigeration unit until burial. Washing areas and drainage facilities must meet state standards. The unlicensed undertakers say they only sell a family a coffin and pick up the body for burial. Similarly, licensed morticians often front for unlicensed newcomers for a fee when picking up bodies at mortuaries that are strict about paperwork. Both practices violate health regulations. And playing a shell game with a corpse clearly opens the way to abuse. Employees of Anubis, a German-funded nonprofit burial service near Durban, say they often come upon bodies kept for days in informal funeral parlors, cooled only by a fan, or in backyards.

The growing problem of disposing of unclaimed bodies is worst in the countryside. There, families often shun AIDS victims because of the shame attached to having the disease, health workers say. Police will be called to collect a body, often from a hut in an isolated corner of a family plot, and no one ever comes to claim the remains. By law, the state then must eventually bury the corpse, at a cost of nearly $150. The problem of abandonment is also growing at public hospitals. Winning bidders have sometimes raised profit margins by leaving bodies to decompose for months while shopping for cheap grave sites.

KwaZulu-Natal officials, taking their cue from President Mbeki and other African leaders, barely acknowledge the extent of these problems. Citing apartheid-era abuses, the provincial health department recently announced that it will take over administration of public morgues from the police, and will build more. But discussion of KwaZulu-Natal’s escalating death rate is all but taboo. The top provincial health policymaker failed to return repeated phone calls.

So far the province has even withheld the latest data on HIV infection rates–thought to be about 35 percent among adults–from the country’s leading actuarial analyst. “The government has said we cannot give out statistics,” says one local health worker, adding, “It’s desperate, I promise you–people are being brought into our hospitals and clinics and left to die.” The most conservative independent estimate is that AIDS now accounts for nearly a third of all deaths nationally and more than 40 percent in KwaZulu-Natal–some 500 deaths a day in total. But in a BBC interview last month, Mbeki deflected discussion of the AIDS crisis, saying “violence in the society” is the leading cause of death.

The toll is rising. Insurance experts say deaths could reach 16,000 a day nationwide by 2005. Mbeki may want to suppress the extent of the epidemic, but it will be hard to hide the costs if the government becomes the final custodian of many AIDS victims. Government cremation of abandoned bodies might check the trend, but the practice violates African tradition: the body must be buried intact to enter the spirit world. No other African government has taken the cremation step, and Mbeki won’t be the first. The government can hardly view the informal sector as competition–the better it functions, the less burden on the health budget. So it’s boom time for Deathtown.