The Durban Terminal Pier 2 in Bayhead Road. Picture: Doctor Ngcobo / Independent Newspapers
International Container Terminal Services Inc. (ICTSI) yesterday said that it would focus its energy on the court upcoming hearing in March next year, which may decide whether it retains its hold on the 25-year contract to upgrade and manage the Port of Durban’s Pier 2 after the bid was challenged by APM Terminals, a Dutch-based subsidiary of the Danish AP Moller-Maersk Group.
In a statement yesterday, Hans-Ole Madsen, ICTSI’s regional head for Europe and Middle East and Africa, said they were disappointed by the KwaZulu-Natal High Court’s decision to deny their application for leave to appeal an interdict which temporarily stops Transnet from implementing the public-private partnership agreement with the Philippines company.
“ICTSI maintains that the reasoning underpinning the interdict stems from a fundamental misunderstanding of the technical financial metrics at the heart of the matter, and the evidence provided by Transnet and ICTSI to the court was not considered,” Madsen said.
“ICTSI believes that the denial of leave to appeal represents a missed opportunity to rectify errors but will continue to vigorously defend its position when the main case is heard in March 2025.”
ICTSI charged that the interim interdict, which prevents Transnet from implementing the private-public partnership, has halted a major infrastructure project needed to ensure the country’s largest container port runs smoothly and increases exports from South Africa.
In its statement at the issuing of the court ruling in October Transnet said it would abide by the interim interdict, as part of building public trust in the organisation’s governance and procurement processes as well as to further expedite conclusion of the matter.
Transnet said it was already taking steps to stabilise port container volumes, in line with the Recovery Plan.
Plans to stabilise volumes include the implementation of a fleet renewal plan in the short, medium, and long term, which is aimed at significantly reducing the backlog in maintenance and catching up with the historical underinvestment in equipment and maintenance.
It said it was in the midst of replacement and refurbishment of key equipment such as ship-to shore cranes (STS), rubber-tyred gantry cranes (RTGs), rail-mounted gantry cranes and tugboats at various ports is underway.
“Long-term collaboration with Original Equipment Manufacturers (OEMs) across the business is already beginning to yield the desired results, as evidenced by improved equipment performance and reliability, spares support, asset life cycle management, innovation as well as equipment, spares and component standardisation. Investment in critical equipment is crucial to maintain operational efficiency and competitiveness,” Transnet said.
ICTSI yesterday continued to accuse Maersk of approaching the courts to overturn the contract on a non-material technicality, that it had misleadingly argued that ICTSI does not meet a technical definition of solvency, a metric used to show its financial ability to meet its obligations.
“ICTSI disputes Maersk’s narrow interpretation of how solvency should be calculated and argues that its measure of solvency is adequate given the tender did not prescribe how this metric must be calculated,” Madsen said.
“ICTSI adequately proved its financial capacity to perform on the terms of the contract during the bidding phase. Transnet and their auditors were satisfied with this when it took the decision in July 2023 and in a second independent review in 2024. We remain resolute in our belief that the main case will demonstrate the strength of our financial position.”
Transnet confirmed that the interim interdict does not set aside the awarding of the DCT Pier 2 contract to ICTSI.
“In Part A of its application, APMT sought an urgent order interdicting Transnet, in short, from negotiating, concluding and implementing the contract award to revitalise Pier 2 at the Durban Container Terminal,” it said.
“In Part B, which is yet to be heard in court, APMT, essentially seeks to set aside Transnet’s decision to select ICTSI as the preferred bidder. It would, therefore, be premature to make any determination in this regard.”
BUSINESS REPORT