Transnet selects Philippines-headquartered port operator for Durban Pier 2

Transnet has announced Philippines-headquartered International Container Terminal Services Inc (ICTSI) as the preferred bidder for the 25-year joint venture to develop and manage Durban Container Terminal 2 Pier. 

Durban Container Terminal 2 Pier is SA’s largest container terminal, handling 72% of Durban’s port throughput and 46% of SA’s port traffic. 

A total of 18 responses were received to Transnet’s initial call for request for interest in August 2021, nine of them from global terminal operators. Ten bids were shortlisted, and six bidders submitted proposals.

ICTSI is the Philippines’ largest multinational company, with operations in 20 countries. It is not aligned with any shipping company and is therefore regarded as a neutral operator with a reputation for excellence.

“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,” says Transnet Group CEO Portia Derby.

Transnet says the deal with ICTSI will improve the logistics at SA ports and stimulate trade to and from the country. 

This is a growth strategy to increase port capacity from 2 million to 2.8 million twenty-foot equivalent units (TEUs). Transnet says the ultimate goal is to increase the current container capacity through Durban from 3.3 million to 11.4 million TEUs.

A new company will be formed to manage the operations at DCT Pier 2, in which Transnet will have majority ownership of 50% plus one share. 

The agreement is for 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. 

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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 B-BBEE contribution status, says Transnet in a statement.

The terminal operating licence 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 under the same terms and conditions as previously existed under Transnet.

“Transnet will now proceed to work with the Preferred Bidder to implement the transaction through the execution of the legal agreements, and ensuring compliance with all legal and regulatory matters. A way forward on the Ngqura (Coega) Container Terminal process will be outlined in due course,” says Transnet.

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