Public Protector asked to probe Nelson Mandela Bay mayor's R250k-a-month transformer deal
The Public Protector has been asked to probe Nelson Mandela Bay mayor Babalwa Lobishe’s decision to rent out a municipal transformer to a private company in a deal worth a whopping R250,000 a month.
The one-year lease had allegedly been finalised before the council gave the green light, with the R25m transformer already in Coega Steels’ hands.
Coega Steels, a private steel manufacturing company based in the Coega Industrial Development Zone, needed the transformer after one of its own units was alleged to have packed up.
The deal burst into the open when angry councillors baulked at an October council meeting after being asked to sign off on it.
City manager Lonwabo Ngoqo then said the metro planned to take the lease agreement, which had already been concluded with the steel company in September, on judicial review in the High Court.
The controversy blew up again earlier this month when Siyanda Mayana opened a case of unlawful removal of state property at the Humewood police station in Gqeberha.
Mayana previously served as the GOOD party’s regional chair in the city.
IOL learned a formal complaint had since been lodged with the office of the Public Protector on Thursday, though whether it would be investigated was still to be decided.
Spokesperson Ndili Moski told IOL: “The Public Protector SA confirms receipt of the complaint.
“In accordance with [our] investigation procedures, once a complaint has been lodged with the PPSA, it is screened and assessed.
“That is to determine jurisdiction and whether there is sufficient information, and substantive reasons as to why the matter should be accepted for investigation, among other things.”
He said the complaint was still at the assessment phase.
“Should the assessment reveal there is sufficient information to proceed with an investigation, and it is determined the Public Protector has jurisdiction to investigate the matter, the complaint will be allocated to [one of our] investigators who then commences the investigation process.”
The complaint, drafted by Mayana, asked for an investigation into whether the leasing of the transformer complied with municipal finance laws and whether proper approval processes were followed.
According to the complaint, the transformer was a 132/22kV, 63MVA municipal asset originally installed at the Sonop substation and formed part of Nelson Mandela Bay’s electricity infrastructure.
It said Coega Steels approached the municipality for urgent assistance on August 21 after its own transformer failed.
The following day, then acting city manager Ted Pillay allegedly decided to make the municipal transformer available to the company, despite there being no council resolution, no completed due diligence process, and no technical report authorising the move at that stage.
Only several days later was a request made for a technical assessment, and on August 26, the municipality indicated its intention to assist and to draft a memorandum of agreement.
However, the complaint said no such agreement was ever approved by the council before the transformer was relocated.
The lease agreement was ultimately signed on September 11.
The complaint alleged this was done without following the statutory processes required by the Municipal Finance Management Act and the Municipal Asset Transfer Regulations, which require council approval and public participation when leasing or disposing of high-value municipal assets.
It further alleged that the National Treasury was informed that a due diligence exercise had been carried out, a claim the complaint said was false.
The complaint also raised questions about who authorised the physical relocation of the transformer, who paid for its transport and insurance, who was responsible for its maintenance, and how long the asset would remain in the possession of Coega Steels.
Approached for comment, Mayana confirmed sending the complaint.
“I have submitted the complaint due to the unlawful and unauthorised removal of a municipal transformer to a private company,” he said.
“The mayor approved the decision and instructed the city manager to sign.
“Firstly, the mayor is a politician, so she has no business getting involved in administrative matters, particularly procurement matters, because it is against the MFMA.
“It is unlawful for her to get involved.”
Secondly, he said that even if she had not been involved, the transformer should not have been moved because the process had allegedly been irregular.
“This is how the process goes: if any municipal asset is going to be leased to anyone, there needs to be public participation first, followed by a council resolution.
“None of that happened.
“The company wrote to the municipality.
“Within two days, they facilitated the move and did it without any council approval … no process took place.”
Coega Steels said at the time, and until it was approached by the media, it had had no reason to believe the lease of the transformer was irregular or illegal.
“The industrial-scale transformer in question is not a standard, off-the-shelf item and given its cost, is not held in stock by industry,” a spokesman told IOL.
“These units are custom-built and typically held as spares only by a few municipalities or Eskom.”
As a customer of the municipality, the spokesman said after the transformer failed, Coega Steels had approached the metro when it became apparent a suitable replacement transformer was not commercially available in SA.
“Given the urgency of the situation — with production halted and hundreds of jobs at stake — Coega Steels submitted a formal request to the municipality outlining the potential economic impact.”
Following this, an apparent memorandum of understanding was concluded, and, subsequently, a lease agreement was signed.
The spokesman said they had been led to believe the municipality had a transformer in storage as a municipal spare and they had understood it had been unused since 2018.
“It is important to emphasise that Coega Steels was not, and is not, privy to the municipality’s internal administrative or legal vetting processes.
“Our engagement has been strictly in accordance with the guidance and procedures communicated to Coega Steels by municipal officials.”
The company further said Eskom had indicated a willingness to assist.
“However, the available Eskom transformers were of a different vector group, which made them technically incompatible with our existing infrastructure.”
Attempts to obtain telephonic comment from Lobishe had proved unsuccessful.
Lobishe previously said in a media address she was being targeted by “smaller parties” ahead of the local government elections.
Her party, the ANC, had also raised concerns.
In a widely circulated letter, the ANC’s Eastern Cape secretary, Lulama Ngcukayitobi, said: “If proven true, it raises concerns regarding governance, accountability, and the protection of public assets …[we] formally request you [Lobishe to] submit a detailed report on the matter.”
Lobishe had also been in the spotlight this month over a separate controversy.
Mayana alleged on social media that her bank accounts had been frozen after what he claimed were large sums of money paid into them towards the end of 2025.
He reported the matter to the police.
Hawks spokesperson Lt-Col Avele Fumba said they were now looking into the complaint.
Mayana said he had met with the Hawks again on Thursday to discuss the matter further.
In a Facebook post, Lobishe said her account had not been frozen but had instead been “temporarily paused”.
IOL