DA asks court to make Nelson Mandela Bay mayor pay for R25m transformer lease

With the sheriff of the court already knocking on Nelson Mandela Bay Mayor Babalwa Lobishe’s door, the Democratic Alliance (DA) in the metro hopes the high court in Gqeberha will rule in its favour and hold the mayor and former acting city manager Ted Pillay personally liable for their hand in leasing a R25-million asset to a private company.

Speaking outside City Hall on Thursday, 8 October 2026 — just 26 days before the 4 November local government elections — DA mayoral hopeful Retief Odendaal said the party had applied to the court for an order compelling the City to “recover unlawful expenditure under the Municipal Finance Management Act (MFMA) from Lobishe and Ted Pillay in their personal capacities”.

The latest court action comes as Lobishe faces a separate legal headache at home, where the Sheriff is armed with a writ that could see her movable assets attached and potentially auctioned to recover R82,970.88 in legal costs owed to People’s Power leader Siyanda Mayana.

The DA’s application relates to the controversial lease of a 132/kV, 63 MVA municipal transformer, valued at about R25-million, to private company Coega Steels in August 2025.

Pillay, who was one of the City’s acting city managers at the time, and Lobishe signed off on the lease of a transformer that had been at the Sonop substation since 2018, after Coega Steels turned to the municipality on 21 August 2025 for help when its own transformer failed on 14 August 2025, putting about 600 jobs at the steel manufacturer at risk.

After the transformer broke, the company was losing R700,000 a day, according to a report to the mayoral committee by former acting executive director for electricity and energy Tholi Biyela.

On 22 August, Pillay responded to Coega Steels, saying that it would lease the transformer. The rental agreed was R250,000 a month for 12 months.

Lobishe, even though the City’s Budget and Treasury directorate raised several concerns over the lease of the transformer, gave it the green light between 4 and 8 September 2025. By 11 September 2025, the lease of the transformer had been finalised.

However, at a council meeting in October 2025, when Lobishe brought the issue of the transformer to council, DA metro council leader Rano Kayser pointed out that the lease was recorded on a document that looked as if it was “bought at PNA or Clicks”, with handwritten annotations, Daily Maverick has reported.

It was also at this council meeting that it was decided that the transformer lease matter should be taken on judicial review, in a bid to have the agreement set aside.

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“We know that the process with the transformer was unlawful.

“So we know that the handpicking of a company was irregular and therefore all of the expenditure relating to that contract will be irregular.

“Then you must also remember that there will be hundreds of thousands of rands in wasteful expenditure. That is expenditure that was incurred as a result of this unlawful contract that was entered into,” said Odendaal.

“There was a legal dispute between the lessee and the lessor, the municipality being the lessor. There [were] also incidental costs relating to the transformer.

“So all … we are asking [is] for it to be deemed irregular expenditure and wasteful expenditure and that the municipality be compelled, that an order of court says, this was unlawful, and the irregular and unauthorised expenditure and wasteful expenditure has to be recovered directly from the former acting city manager (Ted Pillay) as well as the mayor in their personal capacity.

“We’ll also be interested to see whether they actually defend this in respect of using the municipality’s attorneys on record because that would incur additional expenditure, and should we be successful, will only add to their woes,” Odendaal said.

According to the DA’s court papers, Lobishe and Pillay should be held personally liable for, among other matters, the cost of the attorneys fighting the judicial review and any costs incurred.

Asked by Daily Maverick how much the DA hoped to recover from Lobishe and Pillay, Odendaal said he could not at this stage put a figure on it.

The mayor has previously, and on Thursday, strongly defended the decision to lease the transformer to Coega Steels, maintaining that it was necessary to safeguard jobs and protect the local economy.

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But during a parliamentary cooperative governance and traditional affairs committee meeting in April, she acknowledged that the lease had not been properly authorised and was irregular.

On Thursday, Lobishe said that the City had not incurred any cost related to the leasing of the transformer.

“Instead, the municipality benefited from the transformer being leased to that company,” she said.

According to Lobishe, the “silver lining about all of this is that the Democratic Alliance is exposing itself; how it does not care about our people.”

Lobishe insisted that leasing the transformer to Coega Steels – which has since returned the municipality’s movable asset and acquired its own – was to protect the jobs of “ordinary men and women that were going to lose jobs”.

“We kept an investor, because that is an international company. I don’t know them. I’ve never met them, but I’ve met their write-up, which touched my heart that we can’t lose jobs”.

Pillay was approached for comment, but had not responded by the time of publication.

DA spokesperson for electricity and energy Ondela Kepe also made several attempts in April to hold Lobishe accountable over the transformer lease. However, the motion was never tabled in council.

Kepe said it was “quite interesting” since the Speaker’s Office had “fumbled a lot of motions that we’ve put forward, but this is the first motion that they have ever flat out just ignored”.

“There’s a reason behind this [and that is] because they are afraid to even take it to council to be heard, because there are discerning voices, even amongst their own ranks within the ANC” of how the matter was handled “and they are afraid to take it to council because they are afraid of the accountability that is going to come with this,” Kepe said.

An ANC Provincial Integrity Commission investigation into the transformer saga found no evidence that Lobishe had personally benefited from the transaction, or broken the law.

When approached for comment on Thursday, Coega Steels replied that “the arrival of two power transformers at Coega Steels marks a significant milestone in the Nelson Mandela Bay company’s journey to self-sustainability”.

According to its statement, the Chinese-manufactured transformers arrived in Gqeberha in July. The first transformer went online in September.

Two units arrived in separate shipments, around four weeks apart, after which the leased unit was removed and returned to the municipality.

“We have written a letter conveying our sincere gratitude to the City,” a statement by the spokesperson for the company said.

The manufacturer said it decided to commission a second transformer to provide security in the event of an unexpected failure. It should be operational towards the end of the first quarter of 2027. Once online, the transformers will operate concurrently.

Odendaal said that the hope was that the application would be used to sort out irregular expenditure in the City

“It will continue unabated because it’s so difficult to prove corruption. And based on the outcome of this case … we will be able to stop it in its tracks,” he said. DM