International Container Terminal Services Inc. (ICTSI) was announced as the preferred bidder for the Durban Container Terminal 2 almost two years ago. However Transnet, ICTSI and Maersk, the losing bidder, are engaged in a legal battle which returns to court at the end of April.
Image: Leon Lestrade/ Independent Newspapers
Banele Ginidza
Phillipines-based shipping container lines conglomerate, International Container Terminal Services, Inc. (ICTSI), has reaffirmed the legitimacy of its partnership with Transnet for the development of Durban's Pier 2 terminal.
The dispute with Danish shipping giant Maersk, which returned to the KwaZulu-Natal High Court for two days of deliberation, could significantly impact one of South Africa’s crucial trade gateways.
The High Court issued an interdict last year, temporarily halting the collaboration following Maersk's legal challenge.
Despite ICTSI's bid being announced as the preferred option on 11 April 2023, the court's previous decision led to significant frustration regarding delays in critical upgrades to the terminal.
ICTSI has since expressed concern that the ongoing legal disputes could further postpone necessary enhancements.
In a statement on Tuesday, ICTSI emphasised their readiness to commence implementation of the project immediately, asserting that their partnership with Transnet would introduce greater operational efficiency and transparency at Durban Container Terminal Pier 2.
"ICTSI stands ready to begin implementation immediately and remains committed to partnering with Transnet to deliver improved operational efficiency, transparency, and reliability at Durban Container Terminal Pier 2," it said.
"Unlike Maersk, ICTSI is not vertically integrated into shipping and port operations, allowing it to serve all shipping lines impartially," it said on frustrations with the delays stemming from Maersk's legal challenge. ICTSI reiterates its full confidence in the integrity, fairness and transparency of the process, run by Transnet."
ICTSI decried that the challenge by Maersk was lodged nearly a year after the preferred bidder was publicly announced and is based on their interpretation of the financial solvency ratio — a metric that was not a disqualifying factor at any stage of the tender process.
"It is important to clarify that ICTSI and all other bidders disclosed their financials during the Request for Qualification (RFQ) phase in early 2022," it said.
"ICTSI’s not only met the required criteria but exceeded them. When final bids were assessed, ICTSI offered R12 billion for the concession and received a 100% evaluation score compared to Maersk’s R9.2bn and evaluation score of 83%."
Transnet on Tuesday noted that it was the first day in the legal matter at the KwaZulu-Natal Division of the High Court in Durban.
"Transnet and APM Terminals made their initial submissions to the court and will make further submissions tomorrow (Wednesday), which will be followed by ICTSI’s presentation of its case.Transnet will await the court’s decision at the conclusion of the case," Transnet said.
In an interview earlier this year, Transnet Ports Terminals CEO Jabu Mdaki said the entity would continue with investments to the Pier 2 infrastructure while the court ruling held the partnership in abeyance.
He said TPT would re-evaluate the inputs, to go into developments, have committed resources that would - That does form part of the contractual issues, what it is that we are doing will be taken into account once the dust settles and depending on which direction this will be settled. The viability of the terminal needs to continue to be a working terminal.
"Our position with Pier 2 is quite important for the economy. We are not going to compromise the viability of Pier 2, which is the reason we are continued investing equipment like the 20 straddle carriers," Mdaki said.
"We have also placed an order for 4 STS cranes for Pier 2 to be delivered second half of this year. This a huge investment, one cannot allow equipment deterioration to continue while waiting for the legal outcome and the counterchallenges that might come. It is important to continue with the business and strengthening the business as well."
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