Taking Eskom in hand is just what battered economy needs

After weeks of denials that the country is in the grip of an energy crisis that threatens to derail the economy, the government has finally stepped in to right the ship at Eskom.

Minister in the Presidency Jeff Radebe announced yesterday that diesel imports would be ramped up and a deal struck within a month with the private sector to launch an independent coal-fired plant programme.

Efforts will be made to kickstart a programme whereby gas will replace diesel to power turbines. Existing contracts with private electricity producers will also be extended and electricity demand better managed through the introduction of efficient technologies in municipalities, private homes and commercial buildings.

Most encouragingly, Eskom - along with the embattled SAA, which will now fall under the National Treasury, and the SA Post Office - will be closely overseen by Deputy President Cyril Ramaphosa.

This is exactly the right medicine for these ailing parastatals - they simply cannot be left to negotiate their own way out of trouble. They have been given far too much easy money - and time - to turn themselves around and have failed dismally.

The fortunes of Eskom are closely tied up with the broader economy and the load-shedding debacle of 2008 cost South Africa tens of billions of rands and untold numbers of precious jobs.

The disclosure this week that the cash-strapped power utility had not ordered sufficient quantities of fuel for its diesel-powered turbines, which have been forced to run at full capacity because of unscheduled outages and maintenance at coal-fired plants, was too much to bear. And the admission that load-shedding was likely to remain a fact of life in 2015 sent the rand down to 2008 levels.

It will take many months, if not years, to convert the diesel turbines so that they can be powered by gas, which is far cheaper.

In the interim, it is critical to ensure that Eskom gets enough diesel, at least until the much-delayed Medupi plant begins to contribute power to national grid.