ICTSI to challenge KZN High Court ruling halting Durban port contract

Without timely improvements, local exporters face dire consequences, particularly as logistics providers begin to pivot towards alternatives in Walvis Bay and Maputo.

Without timely improvements, local exporters face dire consequences, particularly as logistics providers begin to pivot towards alternatives in Walvis Bay and Maputo.

Published Nov 12, 2024

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International Container Terminal Services Inc (ICTSI) has announced its intention to review a recent High Court decision in KwaZulu-Natal that has halted its operating contract for Pier 2 at the Durban Container Terminal, crucial juncture for South Africa's trade and economy.

ICTSI, a prominent player in global port operations, emerged as the preferred bidder for a 25-year joint venture with Transnet in July 2023, pledging an investment of over R11 billion towards significant upgrades in terminal capacity and productivity.

This move was seen as integral to enhancing the South African government's commitment to improving port performance, ensuring that the Durban port remains a vital artery for national and regional trade.

The burdensome reality is that the Durban container port's efficiency is paramount to the sustainability of several key industries in South Africa.

Without timely improvements, local exporters face dire consequences, particularly as logistics providers begin to pivot towards alternatives in Walvis Bay and Maputo.

The repercussions of delays in port operations pose severe risks, not only to exporters but also to the entire ecosystem of hinterland cargo services.

Despite the transparent and fair bidding process that crowed ICTSI's success, a legal challenge has arisen from APM Terminals, a subsidiary of shipping giant Maersk.

The challenge questions the validity of ICTSI’s selection, primarily rooted in a non-essential technicality examining solvency levels, criteria that many major global corporations, including the likes of Apple, may struggle to meet.

Marcus Aldabra, Chairman of ICTSI, highlighted that the legal maneuvers by Maersk aim to entrench its dominant position in the maritime market, effectively stifling competition and hindering progress in port operations.

"The selection process was exhaustive and strictly adhered to regulations," he stated.

"It is clear that Maersk is more interested in maintaining its market leverage than in fostering improvements that benefit all users of the port."

Aldabra further said that approximately 40% of the top companies listed on the Johannesburg Stock Exchange would also find it challenging to meet this misapplied metric.

“We have immense faith in South Africa's judiciary system," Aldabra added.

"Our commitment is steadfast; we will pursue every legal avenue to ensure that economic opportunities at Durban's port are not stalled by self-serving interests."

The ongoing legal proceedings, which have already spanned over nine months since ICTSI's selection, threaten to delay the implementation of this innovative public/private partnership, one that could revitalise the region's economic landscape.

BUSINESS REPORT