Orion staff at the launch of the company’s water reclamation plant where, according to information before the Nelson Mandela Bay city council, there are now serious technical problems. (Photo: Nelson Mandela Bay Municipality) 
While Nelson Mandela Bay Executive Mayor Babalwa Lobishe hinted at “municipal negligence” as the reason a R61-million, award-winning water reclamation plant, set up by Orion Engineered Carbons, has hit a snag, she withdrew an item dealing with Orion’s water tariffs at Monday’s city council meeting after complaints that it was too vague.
The company is seeking a reduction in its water tariffs as a result of technical issues at the plant.
In its sustainability report for 2023, the company described the project as follows: “Orion is building a reverse osmosis plant to treat grey water from a local water treatment works so it can be reused in carbon black production at our Nelson Mandela Bay plant.
“Currently in its pilot phase, this project aims to reduce the facility’s demand for fresh water in a water-stressed area that has been subject to drought and water restrictions.”
The next year’s report states: “In October 2024, Orion celebrated the completion of its new $3.6-million (about R61-million) wastewater treatment system at our Nelson Mandela Bay facility in South Africa.
“By treating grey water from a local water treatment works so it can be reused in carbon black production, the system means that our plant now has less need for fresh water, ensuring more is available for the local community in this water-stressed area.”
In 2024, the project won the Chemical and Allied Industries’ Association Award in the Responsible Care Report category for its innovative Brown Water Reclamation Sustainability Project.
But three months into operation, the company realised that the plant was not working optimally – it was not designed for fluctuations in water quality.
Council meeting
During Monday’s council meeting, councillors began to vote for the motion when, as happens at many council meetings, a cacophony of complaints broke loose.
The complaints came from across the political spectrum, including the ANC, Lobishe’s own party, and lamented that the municipality had not provided enough information to enable an informed decision by councillors.
“This item must come back better,” said ANC councillor Sinebhongo Kwatsha, adding that reports from the task team that worked on the project were missing.
“Who are these people?” she asked. She further said it should be explained why the tariff concession was considered for up to three years, as the company hadn’t asked for that. Referring to the previous, highly controversial, acting city manager Ted Pillay, she said: This is one of Ted’s items. I am scared when it comes to Ted’s items. Today we have a case in the high court because of Ted.”
The ACDP’s Lance Grootboom said council should be “very, very, very careful” as the budget had already been approved. He said the Municipal Finance Management Act required tariffs to be transparent and added that the council should ask for a legal opinion.
Last week, councillors met the National Treasury in what was described as a “horrible” meeting where the metro was urged to deal with R22-billion in irregular, wasteful, unauthorised and fruitless expenditure – the highest figure in the country.
Also read: Treasury threat to withhold NMB’s December equitable share over R22bn wasteful expenditure
The EFF’s Siya Mosi said councillors were given limited information, but were expected to make decisions that could cause havoc. He said officials had to learn to trust the council and provide sufficient information in their reports.
This is the second time in consecutive council meetings that an item with insufficient information was placed before the council and then withdrawn by Lobishe.
Previously, she also asked for council to, retrospectively, endorse a decision to lease a R25-million transformer to Coega Steels. This was also withdrawn after acting city manager Lonwabo Ngoqo agreed to take the matter to the high court on review.
But this was only after the rental agreement was signed, rent was paid, and the new transformer, which was awaited by the company, had arrived in the country.
Read more: NMB’s lease of R25m transformer to Coega Steel heads for high court
Read more: ‘Jobs on the line’ — Coega Steels explains emergency lease of NMB metro transformer
Lobishe has stressed, as did President Cyril Ramaphosa in his speech at the roll-call of ANC mayors in South Africa, that everything possible must be done to save jobs and protect the operating environment of companies in the metro.
However, Democratic Alliance leader in the council Rano Kayser said on Tuesday that they were, once again, heading towards a “scandal”. He pointed out that there was insufficient legal authority for the decision.
While there was major confusion in council and discrepancies in documents about what was requested, the letter, by Orion Managing Director Nomfundo Faltein, appears to ask that the company be charged for water use at “brown water rates” from January 2024 (retrospectively).
This would be about 80% less than what the company was charged for potable water. What the metro wants to do is, however, unclear from either council documents or the debate in council.
Councillors did question the timeline, prompting chief financial officer Jackson Ngcelwane to answer: “The discussion started in April of this year. Orion also submitted documents to the municipality, basing their request on the investment that they have made. He said the rate concession did not have to be for three years and could be shorter.
Fats, oils and grease snag
Infrastructure and engineering executive director Barry Martin said what became evident [in their discussion with Orion] was that the plant was not designed for fats, oils and grease. These are removed upstream before they get to the plant. The fats, oils and grease damaged their plant’s membranes.
“We will be available for Orion in future to indicate what the condition of the effluent is. We provided the information to them. The shortcoming was about fats, oils and grease,” he said.
However, he claimed that they had provided this information to councillors, but Kayser said it was not part of the agenda.
“We don’t have it, but you expect us to make an informed decision?” Kayser said. “You love scandals. Are we really a municipality that is obsessed with scandals?” he asked. “Bring that engineering report.”
Orion is one of the metro’s largest water users with accounts that run into millions of rands. The difference between potable water rates and brown water rates is significant. But as the letter was not dated, councillors struggled to figure out the request for a retrospective change in water rates.
/file/dailymaverick/wp-content/uploads/2025/11/Orion3.jpg "Nelson Mandela Bay council dignitaries at the launch of the reverse osmosis plant earlier this year. (Photo: Nelson Mandela Bay Municipality)")
The DA’s Dries van der Westhuyzen said the investment in a reverse osmosis plant was admirable. “However, it was done to reduce their [the company’s] cost.
“The company admits that their design was not optimal,” he said. “They did not design for fluctuation in the water quality. They only realised that this water quality doesn’t work for their plant, two months after they made it operational,” he said.
“But the bad water quality has been there since 2022,” he said. “They said in their report that it will take them another three years to design for the [present] water quality… but there is no guarantee that after three years their design will be able to cope with the water quality,” Van der Westhuyzen said.
Fishwater Flats’ Water Quality is now 80% compliant with standards.
Van der Westhuyzen said councillors should be informed if the city could afford it and if it was in line with legislation. “Council must make this decision so the office of the CFO is absolved,” he said. He said he was also concerned that a decision to support Orion in this way would create a precedent.
The request comes as the city is already running at an operating loss of R1.5-billion in the past financial year, and a major contributing factor is water losses.
Read more: Nelson Mandela Bay metro runs up a loss of R1.58bn — and hasn’t even paid its phone bill
The design of the plant happened when the Fishwater Flats Treatment Works was barely operational due to extensive vandalism. Bizarrely, just days before the current council meeting, Lobishe visited the newly refurbished Fishwater Flats Treatment Works last week. In a subsequent statement, the metro said it had invested R10.68-million in the treatment works of its R14-million budget and “most of the upgrades have already been completed or are in the final stages of commissioning”.
But the statement continued: “It will reduce the city’s reliance on fresh water and support industries like Orion… strengthening jobs and economic growth” – even though the plan is not operational.
To mitigate against this problem, Faltein has requested that the company’s water be charged as “brown water” retrospectively from January 2024 to December 2025, as this is what it would have paid without the technical problems. But one of the problems, as Van der Westhuyzen pointed out, is that the mayor’s motion asked for this discounted rate to be implemented for three years.
He said they were further confused by how this would happen, as chief financial officer Jackson Ngcalwane has confirmed that the company’s accounts are paid up to date.
“I think the item does not contain all elements,” Lobishe conceded at the end of the debate. She referred to a “two-year reduction” in tariffs and said this was caused by “what transpired in the treatment works.”
“The investor is now panicking,” she said, “that they incurred costs because of the negligence of the municipality two years ago. If we are not going to try and find a way to mitigate the losses, we might be found wanting. But because the item lacks the necessary information, I would rather propose that we withdraw the item.”
“Yoh, due to the negligence of the municipality… those are big words,” Van der Westhuyzen added.
The matter will further be heard and debated on 4 December.
Daily Maverick has asked Faltein for a response but has not yet received one. DM