Transnet SOC Ltd and the International Container Terminal Services, Inc. (ICTSI) have welcomed the KwaZulu-Natal Division of the High Court judgment, dismissing Maersk’s APM Terminals’ application to set aside the selection of an equity partner for the Durban Container Terminal (DCT) Pier 2. 

Judge Mahendra Chetty delivered the ruling. 

Judge Chetty dismissed the application and said the parties should bear their own costs, including any costs reserved.

In July 2023, Transnet chose Filipino based ICTSI as the preferred bidder for a 25-year joint venture with Transnet Port Terminals. This partnership aims to develop and upgrade the terminal, with due diligence confirming ICTSI’s financial viability.

Pier 2 is the largest single container terminal at Transnet and handles 72% of the Port of Durban’s throughput and 46% of South Africa’s container volumes, making it a critical gateway of trade. 

Transnet said it has consistently affirmed the integrity of its rigorous procurement process for selecting the preferred bidder. A comprehensive due diligence investigation was also completed, which confirmed ICTSI’s financial stability and ability to finalise the transaction.

“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. It paves the way for us to move expeditiously to finalise the implementation of this transaction without undue delay. We remain committed to transforming our ports into world-class hubs that unlock new trade opportunities through the deployment of state-of-the-art equipment,” said Transnet group chief executive Michelle Phillips. 

“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.” 

Transnet indicated that partnering with a private sector entity will enhance DCT Pier 2 terminal productivity and boost terminal throughput. This collaboration is expected to positively impact Transnet, container supply chains, and the overall competitiveness of South Africa’s economy. 

The entity stated that the transaction is a major step in Transnet’s programme to crowd-in the private sector, bringing in global expertise and capital, and improving efficiencies across the organisation’s terminals. 

Transnet reiterated that the tender process was both fair and transparent, and the evaluation process concluded appropriately and objectively, consistent with the public procurement rules in South Africa. 

ICTSI expressed its satisfaction with the judgment, affirming that the tender was awarded to them fairly and transparently. 

“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 have always believed in the strength of our position, and we are pleased that the court has agreed.” 

Madsen said the judgment paves the way for the long-awaited public-private partnership at the terminal to finally be implemented. The terminal, which handles the majority of South Africa’s containerised shipping freight, has previously faced numerous delays and bottlenecks. 

“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,” Madsen said.

The court dismissed Maersk’s challenge against ICTSI’s concession, citing undue delay as Maersk waited until March 2024 to challenge a July 2023 award. The court found ICTSI transparent in its solvency calculations and financially capable, stating a disagreement on one ratio was not grounds to overturn the tender, given the public interest in an efficient port. Maersk’s bid was R2 billion lower than ICTSI’s R11 billion offer.

thobeka.ngema@inl.co.za

Source link