ANC Integrity Commission to quiz NMB mayor over ‘unauthorised lease’ of R25m transformer

Nelson Mandela Bay mayor Babalwa Lobishe has been summoned to appear before the ANC’s Integrity Commission at Calata House in Qonce on Friday, 6 February, in relation to the “unauthorised” lease of a R25-million municipal transformer, which is now subject to a police investigation.

Lobishe will be asked to explain the events that led to the leasing for R250,000 a month of the municipal asset to a private company, Coega Steels, without a council resolution. This was confirmed by several high-ranking ANC sources, who said the acting city manager, Lonwabo Ngoqo, would accompany Lobishe to the commission.

Lobishe could not be reached for comment. She has previously declined to comment on the transformer issue, stating that it was in court and therefore sub judice.

Lobishe is the ANC’s Nelson Mandela Bay regional chair for a second term, and hopes to retain her position as mayor after the local government elections later this year.

It is understood that the two-day commission began with the Chris Hani District Municipality mayor, Lusanda Sizani, being questioned on Thursday, February 5.

Sizani, who also doubles as ANC regional chair in the area, had to explain how he came to be charged with contravening provisions of the Firearms Control Act, after his 9mm pistol was allegedly stolen from his vehicle in East London in March 2025.

Police investigation

Lobishe’s matter came to the Integrity Commission’s attention after former Good party regional chair Siyanda Mayana opened a case at the Humewood police station last month, alleging that Lobishe had unilaterally made the decision to lease the transformer.

The transformer was leased despite Nelson Mandela Bay’s chief financial officer, Jackson Ngcelwane, writing to the then acting city manager, Ted Pillay, in August 2025, that he and others did not support the decision.

“It is ... of great concern that a brand new municipal asset may be handed over to a private service provider without the approval of council or the executive mayor. This may create a problem in the institution, moreso when we don’t have support from the applicable policies and bylaws,” Ngcelwane wrote.

But Pillay and Lobishe had already signed off on the lease.

A legal opinion obtained by the city recommended that the decision be set aside, as it contravened the Municipal Finance Management Act.

Before being called to the Integrity Commission, the ANC’s Eastern Cape secretary, Lulama Ngcukaitobi, wrote a letter to Lobishe, directing her to submit a report detailing corrective actions, accountability measures and steps taken to restore public confidence regarding the transformer issue.

Read more: ANC demands answers from their own mayor over Nelson Mandela Bay's R25m transformer scandal

When it rains, it pours

On 28 January, Lobishe received another letter, this time from the chair of the national Portfolio Committee on Cooperative Governance and Traditional Affairs (Cogta), Zweli Mkhize, raising several issues, including the transformer saga.

Mkhize also demanded that Lobishe account for R22-billion spent on evergreen contracts over the years that bypassed competitive bidding and standard supply chain management processes.

Regarding the lease of the transformer, Mkhize wrote, “This action was allegedly taken without council authority, and there was an alleged attempt to regularise this retrospectively. Whether Coega Steel also participated in the evergreen contracts is to be also specified.”

Evergreen contracts are agreements that automatically renew for another similar term after the initial period expires, continuing on a rolling basis until terminated by either party.

The contracts are a major contributor to Nelson Mandela Bay’s exorbitant unauthorised, irregular, fruitless and wasteful expenditure (UIFWE), which reached an astounding R30-billion last year.

While the city is writing off a portion of the UIFWE, several evergreen contracts remain active due to Supply Chain Management delays in finalising long-term replacements.

Irregular expenditure

“Following the oversight engagement with the Eastern Cape municipalities held in Port Edward from 6 to 10 October 2025 by the Cogta joint committees, the mayor was expected to submit certain reports by a specific deadline,” wrote Mkhize.

“This correspondence serves as a reminder to submit these reports within the next ten working days [3 February 2026].

“It also intended for the mayor and management to reappear before the said joint committees to discuss the matters further. The matters to be reported on are as follows: Evergreen contracts, these contracts were reported to have cost approximately R22-billion, which constitutes an enormous amount of uncontrollable expenditure.”

Mkhize said the joint committees were informed that efforts to review or terminate the contracts always met with resistance from some officials and external threats.

He asked Lobishe to submit details of the evergreen contracts, including:

• The names of the service providers;
• Contract commencement dates, renewal dates and any amendments of the contract terms;
• Monthly and annual payment amounts for the contracts;
• The names of officials involved in the awarding and supervision of the contracts;
• Any irregularities associated with the contracts;
• Any resistance or interference with the processes of terminating or reviewing the contracts;
• Reports to the criminal justice system on irregularities and criminal acts associated with the contracts; and
• Any report or council resolutions regarding any of the contracts.

Municipal spokesperson Sithembiso Soyaya had, at the time of publishing, not responded to questions about the evergreen contracts.

The metro received another qualified audit opinion for the 2024/25 financial year after the Auditor-General of SA flagged seven failings, some of which were repeat offences from the previous year.

“The mayor will provide a report on action taken to rectify weaknesses in the Municipal Public Accounts Committee (MPAC) and actions taken to address UIFWE incurred in 2024/25,” wrote Mkhize.

He also asked Lobishe to address allegations about money deposited into her bank account.

Mayana posted on his Facebook account in January that funds of a dubious nature to the tune of R450,000 were deposited in Lobishe’s bank account, which has since been frozen.

Lobishe denied receiving any illicit funds and said her account had been paused in December due to Fica requirements. DM