18/07/2023
The preferred operator of Durban Container Terminal (DCT) Pier 2 at the Port of Durban in South Africa is International Container Terminal Services Inc. (ICTSI).
The South African state-owned company Transnet SOC Ltd., which controls the nation’s pipeline, port, and railway infrastructure, announced in a regulatory disclosure on July 18 that ICTSI was the preferred bidder for a 25-year joint venture with Transnet Port Terminals (TPT) to run and expand its flagship, DCT Pier 2.
Transnet’s largest container facility, DCT Pier 2, handles 46% of port traffic in South Africa and 72% of the annual throughput of the Port of Durban. The facility includes 120 hectares of container storage and backup space and 1,760 meters of active quay length.
The conclusion of the agreements between Transnet and ICTSI is a requirement for the contract’s final award.
“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 Group chief executive Portia Derby said in a separate statement on July 17.
Transnet stated that once the Public Finance Management Act-related elements of the acquisition have been approved by the South African government, the procedure would be complete.
Transnet: “The partnership with ICTSI will help reposition the terminal for best-practice performance, ensuring growth in volume throughput, and will support the terminal in providing operational and commercial support to access global shipping line call routes.”
Additionally, it is consistent with the Transnet National Ports Authority’s (TNPA’s) plans to raise the Port of Durban’s existing container capacity from 3.3 million TEUs to an eventual capacity of 11.4 million 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 crowd in the private sector in areas identified for growth,” said Derby.
There were 18 responses in all to Transnet’s initial call for expression of interest in August 2021, nine of them from global terminal operators. A total of 10 bids were shortlisted from those who responded to a request for qualifications. Of the shortlisted respondents, six bidders submitted proposals.
Creating a new company to oversee operations at DCT Pier 2 is one of the transaction’s important components, according to Transnet, of which it will hold the majority of the shares (50% plus 1).
In the event that the North Quay at Pier 2’s berth deepening is delayed, the transaction’s term may be extended by up to 30 years, with a 25-year minimum.
Transnet announced that it will now go forward to engage with ICTSI to effectuate the deal by carrying out the legal agreements and making sure all legal and regulatory requirements are met.