Pier 2 is the largest single container terminal in the country and handles 72% of the Port of Durban’s throughput.
by Blue Africa News
A South African court recently cleared the way for the resumption of the strategic redevelopment of the Durban Container Terminal Pier 2 (DCT2), a project considered vital to the country’s logistics sector.
The KwaZulu-Natal High Court in early October dismissed APM Terminals’ application to set aside Transnet State Owned Company (SOC) Limited concession of DCT2 to the International Container Terminal Services Inc. (ICTSI), in exchange for a R11.1 billion (approximately US$640 million) investment commitment at South Africa’s largest container terminal.
Whereas APM Terminals is a port operating company based in the Netherlands, ICTSI is headquartered in the Philippines.
The court battle started after Transnet settled on ICTSI as the preferred bidder for a 25-year joint venture with Transnet Port Terminals (TPT), to develop and upgrade the Durban Container Terminal Pier 2.
According to Transnet, Pier 2 is the largest single container terminal in the country and handles 72% of the Port of Durban’s throughput, alongside 46% of South Africa’s container volumes, making it a critical gateway of trade.
While ruling in favour of the Transnet-ICTSI deal, the Kwazulu-Natal High Court examined Transnet’s compliance with Section 217(1) of the constitution, which requires that organs of state contract for goods or services “in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.”
Judge Mahendra Chetty ruling emphasised that Transnet complied with the constitution and the Promotion of Administrative Justice Act (Paja).
“This ruling confirms the integrity and transparency of Transnet’s procurement processes and governance structures. It removes a major hurdle to the implementation of the transaction – we can now focus all our energy on executing our plan to modernise and expand DCT Pier 2,” said Michelle Philips, Transnet Group Chief Executive, as per a media statement.
The ruling, Philips added, paves the way for Transnet to move expeditiously to finalise the implementation of the transaction without undue delay, stating that they remain committed to transforming the country’s ports into world-class hubs that unlock new trade opportunities through the deployment of state-of-the-art equipment.
“It is unfortunate that our endeavours to stimulate investments at DCT have been delayed. We hope that this unwanted delay is an isolated incident that will not set a precedent for future obstacles, particularly as we move forward with vital private sector participation (PSP) transactions,” she added.
The private sector partner is expected to improve DCT Pier 2 terminal productivity, and increase terminal throughput, with the ruling, barring any appeal, serving as a major step in Transnet’s program to “crowd-in the private sector to bring in global expertise and capital and to improve efficiencies across the organisation’s terminals.
The development comes within a month after the Port of Durban was ranked last in the World Bank Container Port Performance Index (CPPI) for 2024, out of 403 ports ranked worldwide.
Oliver Ochieng, Blue Africa News