Political pressure is mounting on Nelson Mandela Bay mayor Babalwa Lobishe over the alleged unauthorised removal of a municipal transformer, with the ANC in the Eastern Cape demanding answers.
ANC provincial secretary Lulama Ngcukayitobi demanded an explanation on Tuesday about how a R25m municipal transformer was leased out to Coega Steels before the council’s approval.
Ngcukayitobi wants a report from Lobishe explaining how this happened.
He asked for answers by Thursday.
In the letter, Ngcukayitobi said the party had taken note of media reports about the removal of the transformer without authorisation.
“Such allegations, if proven to be true, raise grave concerns regarding governance, accountability, and the protection of public assets entrusted to the municipality.”
He said, though legal processes must be allowed to unfold without interference, Lobishe must still submit a detailed report on the matter.
“However, given the seriousness of the allegations and the public interest involved, the ANC formally requests that you submit a detailed written report on the matter, outlining corrective actions, accountability measures and steps taken to restore public confidence.
“The ANC remains committed to the principles of transparency, ethical leadership and the protection of public resources.
“It is in this spirit that this request is made to ensure that the integrity of local government and public trust in municipal leadership are upheld,” Ngcukayitobi said.
The lease sparked outrage among councillors during an October council meeting when the proposal was brought to the meeting for rubber-stamping.
Former acting city manager Ted Pillay and Lobishe had already signed a memorandum with the company in September, and the transformer was delivered.
However, a legal opinion obtained by the municipality recommended that the decision be set aside, as it contravened the Municipal Finance Management Act regulations.
The regulations require that for a municipality to grant a right to use or control an asset worth more than R10m, a public participation process must first be done.
The R25m transformer was procured to provide backup for the Swartkops and Greenbushes substations.
It was being used at another substation as part of an ongoing project.
However, on September 11, an agreement was signed to lease the unit to Coega IDZ-based Coega Steels at R250,000 a month for a year.
In October, GOOD councillor Lawrence Troon reported a case to the Humewood police station for the unauthorised relocation of the transformer against Pillay.
An item brought to council during the December 4 council meeting noted that if Pillay and former acting electricity and energy boss Tholi Biyela still worked at the municipality, both would have been charged with serious financial misconduct and negligence.
On Thursday, Coega Steels CEO Hassan Khan said that after the company’s main power transformer failed in mid-August, it urgently pursued every possible replacement option to avert a production shutdown and the resulting job losses.
“It quickly became apparent that no suitable transformer of the required specification was commercially available in SA.
“As a major electricity customer of the Nelson Mandela Bay municipality, Coega Steels therefore approached the municipality once it was clear that a replacement could not be sourced through the private sector.
“Following this engagement, a lease agreement was signed for a municipal spare transformer, which, we understand, had been in storage and unused since 2018.
“It is important to emphasise that Coega Steels is not, and has never been, privy to the municipality’s internal legal, governance or administrative processes.
“The company’s engagement with the municipality was conducted strictly in accordance with the guidance, procedures and assurances provided by municipal officials,” Khan said.
Khan said the company requested the temporary lease of a suitable transformer held by the municipality.
“Had this request been declined, the company would have proceeded with extensive system modifications to accept an Eskom unit, notwithstanding the significant disruption this would have caused.”
Khan said the lease arrangement was mutually beneficial to both Coega Steels and the metro.
“The municipality will earn approximately R3m in rental income from the lease of the transformer and continues to benefit from the sale of electricity to Coega Steels, which generates an estimated annual markup of around R30m for the municipality.
“The lease is expressly short-term and will remain in place only until Coega Steels’ newly ordered replacement transformer is delivered, installed and commissioned.
“That replacement transformer has already been secured and is expected to be operational within the next five to six months. Upon commissioning, the leased municipal transformer will be returned to the NMBM,” Khan said.
ANC provincial spokesperson Yanga Zicina said the party had not received a formal complaint on the matter.
“There is no report processed by the structures of the ANC, unless such a report is with the office of the provincial secretary.”
Zicina said they had seen allegations made on social media by former GOOD member Siyanda Mayana.
“What we’ve seen, however, is social media commentary and videos of one fellow referred to as Mayana, who made these wild allegations about the regional chair, who also serves as mayor.
“As an organisation, we don’t respond to social media commentary. We deal with formal reports. We process reports submitted to the ANC.
“If a report exists, it will be referred to the structures.
“I’m sure the basis, where the provincial secretary wrote to the mayor, is to ascertain whether allegations are true or not and allow the chair to clarify the comments made by the individuals.”
Lobishe did not immediately respond to questions at the time of publishing.
— This is a developing story.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.