Nelson Mandela Bay mayor taken to court over R25 million transformer scandal

The Democratic Alliance has launched an application in the Gqeberha High Court against Nelson Mandela Bay executive mayor Babalwa Lobishe and former Acting City Manager Ted Pillay.

The application seeks to hold Lobishe and Pillay liable for unlawful expenditure incurred in connection with the leasing of a transformer to Coega Steels in September 2025.

The transformer, which has been valued at R25 million in municipal documents, was allegedly leased despite legal advice that Council authorisation was required.

Lobishe reportedly approved the lease, while Pillay signed the agreement, despite being explicitly advised that the matter had to be referred to the Council first.

Member of the Eastern Cape Provincial Legislature, Retief Odendaal, said this was never done, with the lease going ahead without the required authorisation.

“We have applied to the Court for an order compelling the Nelson Mandela Bay municipality to recover unlawful expenditure under the Municipal Finance Management Act (MFMA),” Odendaal said.

“We want to recover every single cent of unlawful expenditure arising from this deal, including the legal costs incurred by the municipality.”

Odendaal said the funds should be recovered from Lobishe and Pillay in their personal capacities, believing there is a strong case for holding them personally liable.

The lease agreement was entered into in September 2025, with Coega Steels agreeing to pay the municipality R250,000 a month to lease the transformer.

Questions were soon raised about whether this was actually being paid to the municipality, as the original lease agreement did not specify a municipal bank account for payment.

Coega Steels maintained that it had continued to make consistent payments to an Absa municipal beneficiary account for electricity payments.

Acting City Manager Lonwabo Ngoqo applied to the High Court to review and set aside the agreement, arguing that it breached MFMA regulations governing asset transfers.

In response, Lobishe claimed the lease was an emergency measure designed to protect local industrial jobs and prevent production from stalling.

Lobishe would later concede before the Parliamentary Portfolio Committee on Cooperative Governance and Traditional Affairs that the deal was made irregularly.

“Mayor Lobishe ignored legal advice, bypassed Council, exposed residents to risk, and presided over a pattern of governance failures,” Odendaal said.

“This has continued to erode trust in the municipality. She has demonstrated that she is not fit to hold office and must be held accountable.”