NMB’s lease of R25m transformer to Coega Steel heads for high court

In August this year, Coega Steel, one of Nelson Mandela Bay metro’s highest energy users, requested to lease a R25-million transformer from the municipality after the smelter’s failed.

On Tuesday, executive mayor Babalwa Lobishe brought an item to council to have the lease agreement of R250,000 a month approved. 

However, as leader of the DA in the metro council Rano Kayser pointed out yesterday, this lease was recorded on a document that looked as if it was “bought at PNA or Clicks”, with hand-written annotations. 

It had also already been concluded, and payment had been received by the metro. Public participation, as required for assets of more than R10-million, did not happen. Kayser said that while former acting city manager Ted Pillay claimed he had done due diligence, the timeframe during which the lease was signed casts doubt on this. “He made the decision in less than 24 hours,” Kayser said.

Criminal case opened

Lawrence Troon from the Good party has opened a criminal case against Pillay, relating to the signing of the lease. 

“I have opened a criminal case. There is no policy for what he did,” Troon said.

As Kayser, who obtained several documents relevant to the lease agreement, was setting out the case for why the agreement should be reviewed, ANC councillor Gama Maqula interrupted him. “I see he got an SMS to go and defend this, from his handlers,” Kayser remarked. 

Maqula did ask for an investigation, however, and was supported by other councillors. It also turned out that the request for the lease had not been seen by the electricity and energy standing committee, with councillors claiming that they had been misled.

Kayser pointed out that the transformer would be vital for power to the Sonop Substation. The DA’s Ondela Kepe said that while the documentation said that the transformer was “a spare”, it was being used for a project.

Councillor Lance Grootboom said it appeared that the lease was agreed to by the mayoral committee, but it never came to council. “What was done here was illegal,” he said. “The mayoral committee didn’t ask any questions.”

The Abantu Integrity Movement’s Khusta Jack said he was worried about the word “investigation”. He pointed out that in the past, many investigations by the metro went nowhere.

He said the shortest route would be for Ngoqo to take the matter to the high court for review since the municipality did not have a good track record on investigations. 

Khanya Nqisha from the EFF said he did not often agree with the DA, but its points were valid. He also asked for action on the lease agreement. 

Ngoqo said the answer was to take the lease agreement for review in the high court. “A report will be given to the council.”

Grootboom said he wanted to know who was behind the lease agreement. Troon demanded that Pillay should be held liable for the extra legal costs. DM