Move could delay the implementation of a pioneering public/private partnership at South Africa’s largest port by years
Port of Durban.
International Container Terminal Services Inc. (ICTSI) has announced that it is to challenge a recent decision of the Durban High Court relating to the awarding of a bid for the operating contract for Pier 2 at the Durban Container terminal in July 2023.
The Durban High Court recently issued an order to stop Transnet from engaging and advancing further with ICTSI, who is the approved partner to operate Durban Pier 2 container terminal, following an application brought by APM Terminals.
Sources say ICTSI’s decision to challenge the order will cause further delays to completing the proceedings started by APM Terminals.
Hans-Ole Madsen, ICTSI’s regional head for Europe, Middle East and Africa, said the process through which ICTSI became the preferred bidder was well-run, rigorous, and transparent.
“Despite this, Maersk’s subsidiary APM Terminals chose to challenge the selection of ICTSI in court. What has been missing in much of the coverage of this ongoing legal challenge is that ICTSI outbid Maersk by US$100mn and that APM is only motivated by its desire to entrench its dominant position and strong price leverage in the market, by preventing the entrant of an independent common user terminal operator at the Durban port,” Madsen commented.
“As ICTSI chairman Enrique K Razon Jr recently said, shipping company Maersk is only focused on protecting its own narrow commercial shipping interests and not that of all users of the port. It is clearly seeking to establish an end-to-end control of South Africa’s logistics system.”
Madsen continued: “As part of their legal challenge Maersk has tried to use a non-essential technicality that examined something called a solvency level. In so doing it is trying to question a non-defined metric that many of the largest public corporates in the world would not meet, including, for instance, Apple Inc. It is also impossible for as many as 40 per cent of the top 40 companies on the Johannesburg Stock Exchange to meet this misapplied metric.”
ICTSI said the qualification rules were clear: Transnet could evaluate the bidders in whatever way was in line with the law and met the public interest, and ICTSI, as one of the largest terminal operators in the world, more than met these requirements.
“The legal proceedings have caused a delay of possibly years in the implementation of a pioneering public/private partnership at South Africa’s largest port. Maersk’s decision to have taken the matter on legal review, more than nine months after the selection of ICTSI, now places the future growth of the South African economy in jeopardy,” ICTSI stated.
ICTSI said it has enormous respect for, and faith in, the South African judiciary and is taking the KZN High Court’s decision to halt the ICTSI contract with an interdict on review. “We will use all legal channels to make sure that Maersk is not successful in holding the Durban port, and indeed the South African economy hostage to their interests.”
ICTSI pointed out that its presence in 19 countries and on six continents has shown that with the right systems in place, there are enormous productivity and process gains that can be achieved in port operations. “We remain confident that given the opportunity to execute on the partnership with Transnet, the Durban Port can again become a critical economic hub for South Africa and the region,” the company said.
