The Nelson Mandela Bay council. (Photo: Andisa Bonani) In an ironic twist, the company Nelson Mandela Bay bent the rules to save has missed the deadline to pay a R45-million bill, which includes R11.9-million in electricity arrears.
The bill was due on 13 May.
While the company has launched a legal billing dispute with the Nelson Mandela Bay metro, the metro still expects it to meet its payment obligation for services rendered.
Coega Steels is one of the city’s high-energy users and a significant revenue generator.
A report submitted to the cooperative governance and traditional affairs (Cogta) parliamentary committee by municipal officials last week, says the company also owes the City for water and rates.
Municipal spokesperson Sithembiso Soyaya said on Thursday that the billing dispute was being attended to through the appropriate governance, legal and revenue management channels.
“The municipality’s position remains that all customers are required to meet their obligations for municipal services rendered, while any disputes raised are addressed through the appropriate legal and administrative mechanisms available to both parties,” he said.
Coega Steels was thrust into the spotlight when the City leased its R25-million transformer last year for R250,000 a month, without a council resolution.
Nelson Mandela Bay Executive Mayor Babalwa Lobishe authorised the deal with two officials who have since left the City – former acting city manager Ted Pillay and former acting electricity director Tholi Biyela – leaving her as the face of the controversy.
/file/attachments/orphans/ED_512819_542327.jpg "Nelson Mandela Bay Executive Mayor Babalwa Lobishe has been asked to explain how the lease of a municipal asset came about. (Photo: Lulama Zenzile / Gallo Images / Die Burger)")
The lease was entered into in September 2025 for a period of 12 months.
A fraud case against Lobishe over the irregular leasing of the transformer was opened in January by former Good party regional chair Siyanda Mayana. Lobishe has not been charged.
Lobishe was also summoned before the ANC integrity commission, which subsequently found her not guilty of any wrongdoing.
Facing sustained pressure from the council and the public, the City has taken the matter to the Gqeberha high court, seeking to have the lease set aside.
Lobishe has consistently defended the deal as necessary, arguing that it had saved jobs at Coega Steels and prevented the closure of the City’s highest revenue contributor.
Soyaya said the City remained committed to protecting public revenue, maintaining procedural fairness and ensuring that all matters were dealt with consistently, lawfully and without prejudice to ongoing processes.
“The municipality is aware of the matters raised regarding Coega Steels and can confirm that certain aspects relating to municipal accounts and billing are currently subject to ongoing legal and administrative processes between the parties.”
He would not be drawn into disclosing information related to the total amount Coega Steels owed the City, including the water and rates bill, or for how long the company had not been paying.
“Given the existence of these processes, and the City’s obligations in terms of applicable legislation governing confidentiality, commercially sensitive information and legal proceedings, the municipality is constrained from publicly disclosing detailed customer account information, including specific disputed amounts, payment histories and account breakdowns.”
/file/dailymaverick/wp-content/uploads/2024/07/iStock-1673726299-1.jpg "In 2023, the City wrote off about R10m in debt after the Coega Steels failed to keep up with payments. (Photo: iStock)")
The latest dispute is not the first involving Coega Steels’ municipal accounts. In 2023, the city wrote off about R10-million in debt after the company failed to keep up with payments.
Coega Steels confirmed last week that the dispute pertained to specific billing discrepancies that were being adjudicated.
“While specific figures remain commercially sensitive and cannot be disclosed, Coega Steels is still one of the region’s largest benefactors to municipal revenue and this contribution continues uninterrupted,” the company said.
Coega Steels said it took its financial and legal responsibilities seriously.
“The mechanisms provided by the Municipal Systems Act are being used to ensure billing is accurate and fair. The company is in ongoing communication with the metro to resolve the electricity dispute and continues to focus on preserving jobs and advancing the industrial economy of the province.” DM