South Africa: The Coega Steel Dilemma - When Governance Rules Collide With Jobs

Before rushing to judgment over the controversial Coega Steel transformer lease, we need to consider whether bending rules in urgent economic crises can sometimes serve the public good -- and what this means for governance in Nelson Mandela Bay

The premature collapse of manufacturing businesses, often following municipal failure to provide critical services or support, remains a tragic feature of our local economic landscape.

These failures underscore a systemic tension: the conflict between rigid administrative processes and the urgent strategic imperative of local economic development.

The recent reports surrounding the Coega Steel (Agni Steels) project and the alleged circumvention of municipal processes to lease a transformer present a complex case in point.

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For context, in August last year, Coega Steel asked to lease a R25-million transformer from the Nelson Mandela Bay municipality after its smelter failed. The lease was reportedly approved in under 24 hours, without council oversight or the public participation normally required for such a large asset.

Executive Mayor Babalwa Lobishe brought the agreement to council for approval, but by then, payment had already been received and the process had bypassed normal oversight.

Critics have raised concerns about informal documentation and the lack of committee review, prompting political and legal scrutiny. The acting city manager has now taken the agreement to the high court for judicial review.

From a policy perspective, investment promotion and retention frequently operate in ambiguous territory, especially when urgent interventions are required to...

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