Manila-based ICTSI is a leading independent global developer and operator of origin and destination container terminals

Port of Durban

South Africa’s Transnet National Ports Authority has selected International Container Terminal Services Inc. (ICTSI) as its equity partner in the Durban Container Terminal (DCT) Pier 2.

DCT Pier 2 is Transnet’s biggest container terminal, handling 72 per cent of the Port of Durban’s throughput and 46 per cent of South Africa’s port traffic.

Headquartered in Manila, Philippines, ICTSI is a leading independent global developer and operator of origin and destination container terminals. It is a publicly listed company, traded on the Philippine Stock Exchange and the Over-the-Counter Markets Group in the US.

Transnet CEO Portia Derby said: “Private sector participation in Pier 2 is a key catalyst for repositioning the Port of Durban as a container hub port. We are delighted to have a global player of ICTSI’s standing on board to drive this process”.

Transnet said the partnership with ICTSI will help reposition the terminal for best practice performance, ensuring growth in volume throughput, and support the terminal in providing operational and commercial support to access global shipping line call routes.

This will not only improve the logistics associated with servicing South African ports but also play a significant part in stimulating exports and imports. “This is a growth strategy for Transnet where Pier 2’s current capacity of 2m TEUs is planned to increase to 2.8m TEUs,” Transnet said.

This aligns with plans by Transnet National Ports Authority (TNPA) to increase the current container capacity in the Port of Durban from 3.3m TEUs to 11.4m TEUs.

“The partnership in Pier 2 is a major step forward for our programme to bring in global expertise to improve efficiencies at our terminals and bodes well for our ongoing plans to involve the private sector in areas identified for growth,” Derby said.

Eighteen companies responded to Transnet’s initial call for request for interest in August 2021, nine of them from global terminal operators. Following this, a total of 10 bids were shortlisted in response to a request for qualifications.

The key element of the new deal is the establishment of a new company to manage the operations at DCT Pier 2, in which Transnet will have majority ownership of 50 per cent plus one share. The term of the transaction is 25 years, with an option to extend to a maximum of 30 years in the event that berth deepening of the North Quay at Pier 2 is delayed.

Non-current assets will be transferred into the new company, together with customer and supplier contracts. The new company is required to achieve a minimum level 4 BBEE (Black Empowerment) contribution status.

The terminal operating license and lease will be subcontracted to the new company, after seeking approval from Transnet National Ports Authority. DCT Pier 2 employees will be seconded to the new entity.

Transnet said there would be no retrenchments, and employees will retain the same terms and conditions before and after the introduction of the private sector partner.

Transnet also announced that it will soon announce (similar) plans for the Ngqura Container Terminal process, but there has been no announcement regarding the Cape Town Container Terminal.