Nelson Mandela Bay mayor Babalwa Lobishe and former acting city manager Ted Pillay could face personal liability for expenditure linked to the controversial lease of a R25m municipal transformer if a DA court application succeeds.
The party wants the court to order the municipality to recover the expenditure from Lobishe and Pillay personally, alleging they approved and concluded the deal despite advice that it first required council authorisation.
DA mayoral candidate Retief Odendaal announced the application on Thursday, saying it had been filed.
The party is not asking the court to set a repayment amount.
It wants a ruling declaring the expenditure unlawful and directing the municipality to determine the amount and recover it.
Pillay told the reporter to contact the municipality.
Responding to the application, municipal spokesperson Sithembiso Soyaya said Lobishe had not seen the papers and would study them before deciding on her next steps.
The case centres on the municipality’s decision to lease a 63MVA standby electricity transformer to Coega Steels for R250,000 a month.
The court papers describe a 12-month lease beginning on September 11 2025, approved by Lobishe on Pillay’s recommendation and signed by him on behalf of the municipality.
According to the application, the deal went ahead without the required council approval, despite advice from the municipality’s legal department and budget and treasury directorate.
Lobishe acknowledged before parliament’s portfolio committee on co-operative governance and traditional affairs in March that the deal was irregular.
The DA’s application argues that Lobishe and Pillay acted deliberately or negligently by proceeding despite the advice, and should be held personally liable under the Municipal Finance Management Act (MFMA).
“By virtue of section 32 of the MFMA, the municipality is peremptorily obliged to recover such expenditure from Lobishe and Pillay,” the papers state.
The application also refers to the municipality’s own review challenge to the decisions behind the lease.
It argues that removing the transformer from the metro’s backup system reduced the electricity network’s ability to provide services and impaired the asset’s value.
“The amount of that expense could not be less than the value of the transformer, contended to be R25m,” the papers state.
Odendaal said the municipality would have to calculate the expenditure to be recovered.
“What we are asking for is a declarator,” he said.
“So the municipality will have to quantify it itself.”
He said the party wanted the court to declare expenditure associated with the deal irregular, unauthorised or fruitless and wasteful, and require its recovery from those responsible.
“We want the municipality to be directed to recover the unlawful expenditure from Lobishe and or Pillay in their personal capacities.”
Odendaal said the transformer had been bought to protect businesses during electricity emergencies, and its removal could have left other businesses and residents exposed to longer outages.
“That transformer was procured as a standby transformer that was there to be used in emergencies to protect the interests of businesses,” he said.
He said repeated outages in Greenbushes could have been avoided as the transformer could have helped businesses avoid extended interruptions.
Odendaal said the case could have wider consequences for the handling of irregular expenditure in local government.
“This is groundbreaking, not just for this municipality, but for all municipalities and government departments in dealing with irregular expenditure,” he said.
He said that the prospect of personal financial liability would discourage politicians and officials from approving unlawful spending.
“Nobody, in their rightful mind, will put their hand on anything that will incur irregular expenditure if we are successful here, because it will hit them on their pockets where it matters the most.”
Odendaal estimated that the case would cost more than R500,000 in legal fees and said he believed municipal attorneys would be used to defend it.
DA councillor Ondela Kepe said the party had previously tried to bring the matter before council.
“We have put motions forward to council before, but this is the first motion that they have ever flat out ignored,” he said.
Kepe said the application sought to ensure that officials and politicians could still be held accountable for decisions taken in office after their terms had ended.
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