ICTSI stands firm on Durban’s Pier 2 deal as Maersk lawsuit continues

SOUTH AFRICA – International Container Terminal Services Inc. (ICTSI) has defended its deal with South Africa’s Transnet for the development of Durban’s Pier 2, as legal proceedings initiated by Danish shipping giant Maersk continue in the KwaZulu-Natal High Court.

ICTSI, a Philippines-based operator, was named the preferred bidder in April 2023 following a competitive process to secure a 25-year concession.

However, Maersk’s terminal arm, APM Terminals, filed a lawsuit challenging the outcome. The case focuses on whether ICTSI met the financial requirements during the qualification stage in early 2022.

In a statement, ICTSI said it “fully met and exceeded” the criteria laid out in the process, adding that it received a perfect evaluation score and submitted a R12 billion (approximately US$642 million) bid. Maersk’s bid was lower, at R9.2 billion (US$492 million), with an evaluation score of 83%.

“The partnership with Transnet is about improving operational efficiency, transparency, and reliability at Pier 2,” ICTSI said. “We are ready to begin work and remain committed to supporting Transnet.”

The KwaZulu-Natal High Court previously issued an interdict halting the deal while the matter is under review.

Transnet confirmed the case is ongoing, with ICTSI expected to present its arguments soon. Transnet and APM Terminals have already made their initial submissions.

Neutral operator

ICTSI underlined its independence in the terminal market, stating it does not run shipping lines and therefore does not face the same concerns about impartial service.

“We serve all shipping lines equally,” the company noted, in contrast to Maersk’s vertically linked model that combines terminal and shipping operations.

ICTSI also questioned the basis of Maersk’s legal challenge, saying the claims center on financial metrics that were not disqualifying in the qualification process.

According to ICTSI, the interpretation presented by Maersk lacks context and does not align with the rules set at the time.

Transnet pushes ahead

Transnet has stood by its decision to select ICTSI and insists the selection process followed all legal and technical requirements. Transnet Port Terminals CEO Jabu Mdaki stressed the terminal’s role in the country’s trade network.

“Our position with Pier 2 is quite important for the economy. We are not going to compromise the viability of Pier 2,” Mdaki said.

Despite the legal dispute, infrastructure investments at the terminal continue. Transnet said it will wait for the court to make a final decision after all submissions are complete.

The outcome of the case could shape the future of South Africa’s largest container terminal, which currently handles over half the nation’s container traffic.

A prolonged delay may disrupt Transnet’s broader plans to attract private investment into port operations, a step seen as crucial to boosting trade flow and easing congestion.

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