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Will govt bail out cash-strapped Eskom?

There's still no indication from government if it will assist Eskom.

FILE: Traffic lights not working in Cape Town as a result of load shedding by Eskom. Picture: AFP.

JOHANNESBURG - There's still no indication from government when it will announce if it's willing to help Eskom financially.

The utility says by the middle of next month it will have run out of money to buy diesel which it desperately needs to run open gas turbines.

The power giant is battling to keep up with electricity demands after a coal silo at its Majuba power station in Mpumalanga collapsed.

It's been several weeks since Deputy President Cyril Ramaphosa was tasked with implementing a turnaround strategy for Eskom.

As yet, there is still no indication of his action plan or how government will help the parastatal which is battling with an energy crisis since 2008.

Meanwhile, the National Treasury says that Eskom should stop running the cash-guzzling diesel-fired power plants after the prescribed minimum period has elapsed.

The utility's Andrew Etzinger said, "On the one hand we would like to keep the lights burning, but on the other, as National Treasury points out, we're in an unsustainable position from a financial perspective. So, tough decisions have to be made."

WARNINGS AGAINST BAILOUT

Energy experts and economists have warned a government bailout will not help Eskom in the long-term to deal with the electricity crisis.

The parastatal said it's expecting about R20 billion from government to help it continue buying diesel.

Energy expert Chris Yelland says Eskom needs to look at the fundamental business problems.

"Throwing money at this is not the solution. It will become like a black hole if you don't address the underlying issues it simply means that in a period of time they will need more money."

Economist Iraj Abedian says a coherent national energy policy is needed.

"The government has failed to come up with a credible and sustainable national energy policy and therefore it has placed extraordinary pressures on Eskom."

Finance Minister Nhlanhla Nene has reportedly read the riot act to Eskom bosses, saying they must sort out their problems which are affecting the economy.

It is understood government will "play its part" but Nene warns that day-to-day operations are the utility's responsibility.