South Africa

Big blow for Durban port privatisation plans

A.P. Moller-Maersk A/S is contesting a process held by South Africa’s state logistics firm Transnet to find a partner to develop sub-Saharan Africa’s biggest container port.

International Container Terminal Services Inc. won the award for buying almost half of the main container terminal in the southeastern port city of Durban and operating it for 25 years.

Maersk unit APM Terminals, which was among the companies that applied for and lost the bid, is challenging that decision through an interdict application in the Durban High Court. 

“We wish to ensure that a proper, fair and compliant process has been followed,” Maersk said in a reply to questions Monday.

The court bid comes as South Africa seeks to boost private participation in state-owned enterprises and improve their lagging performance.

Transnet specifically seeks the turnaround of ports that are ranked among some of the worst in the world and increasing deliveries of its rail operations that drag on the nation’s mining sector.

The deal with ICTSI is the first major attempt to bring the private sector into the operation of the country’s ports.

“It is to be expected that a bidder would find reason to contest an outcome that is not in their favor,” Transnet said, adding that it followed due process to find a partner for its Durban Container Terminal Pier 2.

Transnet’s board on March 1 said it had concluded financial due diligence involved and approved the finalization of the contract with ICTSI, which is owned by Filipino billionaire Enrique Razon. 

ICTSI is opposing the challenge by Maersk, it said in an emailed response, declining to comment further on legal matters.


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