International Container Terminal Services Inc (ICTSI) and Transnet have welcomed the court ruling dismissing APM Terminals’ (Maersk) challenge to halt the awarding of the tender for the Durban Container Terminal (DCT) Pier 2.
The ruling, which was handed down in the KZN High Court (Durban) on Friday, clears the way for a 25-year public-private partnership to modernise the container terminal.
“This ruling reaffirms our confidence in the legality of the bidding process and validates our commitment to operating with integrity and in full compliance with the law,” said ICTSI regional head Hans-Ole Madsen.
“We now stand ready and look forward to working with Transnet at the Durban Container Terminal and the importers and exporters who rely on South Africa’s busiest container terminal to make a range of operational improvements for the betterment of all stakeholders and the South African economy,” he said.
Transnet Group chief executive Michelle Phillips said the ruling confirmed 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,” Phillips said.
The partnership is a key component of Transnet’s strategy to enhance operational efficiency, reduce debt, and share capital investment costs.
The court, presided over by Judge Mahendra Chetty, dismissed Maersk’s application, which sought to overturn Transnet’s July 2023 selection of ICTSI as the preferred bidder for the joint venture with Transnet Port Terminals (TPT).
DCT Pier 2 handles 72% of the Port of Durban’s throughput and 46% of South Africa’s container volumes, making it a critical trade gateway.
Maersk’s challenge, filed in March 2024, alleged issues with ICTSI’s solvency ratio calculation, a metric Transnet used to assess bidders’ financial capacity. The court found Maersk’s application was filed with “undue delay” and that ICTSI had transparently provided credible evidence of its financial viability. The court noted that a disagreement on a single ratio was “not a basis to set aside” the tender, given the public interest in an efficient port.
Maersk’s bid of R9 billion was R2bn lower than ICTSI’s R11bn offer, prompting its attempt to force Transnet to accept the lower bid. The court upheld the fairness and transparency of Transnet’s procurement process, supported by due diligence confirming ICTSI’s financial soundness.
The ruling enables ICTSI and Transnet to proceed with investments in skills and infrastructure at DCT Pier 2, addressing past delays and bottlenecks. The partnership aims to boost terminal productivity and throughput, enhancing the port’s role as a key trade hub.
Maersk South Africa said its APM Terminals division had filed the challenge in good faith based on rules applicable to the tender and that the company remained a committed partner in the country’s development journey.
