The KwaZulu-Natal High Court dismissal of the application to set aside the selection of an equity partner for the Durban Container Terminal (DCT) Pier 2, paves the way for Transnet proceed with plans to modernise and expand the terminal.
“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,” Transnet Group Chief Executive Michelle Phillips said on Friday.
In July 2023, Transnet selected International Container Terminal Services, Inc (ICTSI) as the preferred bidder for a 25-year joint venture with Transnet Port Terminals (TPT) to develop and upgrade the terminal, with due diligence confirming the entity’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 has always maintained that a rigorous procurement process was followed to select the preferred bidder.
Furthermore, a due diligence process was concluded to determine ICTSI’s financial soundness. The financial soundness report confirmed that ICTSI has the financial resources to conclude the transaction.
According to Transnet, the procurement of a private sector partner is set to improve DCT Pier 2 terminal productivity and increase terminal throughput.
The partnership will have a positive impact on Transnet, container supply chains and on the competitiveness of South Africa’s economy.
The Port of Durban is South Africa’s main cargo and container port due to its strategic location along international shipping routes.
“[The ruling] 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.
“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,” Phillips said.
Transnet said the transaction is a major step in Transnet’s programme to crowd-in the private sector to bring in global expertise and capital and to improve efficiencies across the organisation’s terminals.
“Transnet wishes to reiterate that the tender process run by Transnet was both fair and transparent and the evaluation process concluded in an appropriate and objective manner consistent with the public procurement rules in South Africa.” - SAnews.gov.za
