Transnet cements partnership with ICTSI for Durban’s Pier 2 to boost maritime infrastructure

Transnet and International Container Terminal Services Inc. (ICTSI), the world’s largest independent terminal operator, on Wednesday formally signed a 25-year partnership agreement for the operation and upgrade of Durban Container Terminal (DCT) Pier 2.

The signing concludes a lengthy process that included a court challenge lodged by APM Terminals, a Maersk subsidiary, which contested the awarding of the port terminal development contract.

ICTSI’s victory in the matter in October cleared the way for the partnership to proceed.

Transnet described the agreement as a landmark milestone in South Africa’s economic reform agenda and its strategy to attract private-sector investment into key logistics operations.

The State-owned company said ICTSI’s involvement is expected to enhance terminal productivity, increase throughput, and strengthen the country’s container supply chains.

According to Transnet, ICTSI has a globally recognised track record for improving port efficiency and service levels. The company was selected as the preferred bidder in July 2023 after what Transnet said was a rigorous and transparent procurement process.

Under the partnership, DCT Pier 2 will undergo significant modernisation through new equipment and advanced technology.

This is expected to boost container-handling capacity from 2 million to 2.8 million twenty-foot equivalent units (TEUs), raise Gross Crane Moves per Hour (GCH) from 18 to 28, and improve Ship Working Hours (SWH) from 60 to 120.

Transnet said these gains will help reduce logistics costs, improve service quality and attract greater cargo volumes.

Transnet Group CEO, Michelle Phillips, said the terminal has already shown improved performance following the company’s recent investment in new equipment, and the partnership with ICTSI would “propel this crucial terminal to its full potential.”

“Private sector participation (PSP) transactions are an important element of our strategy to modernise, expand and improve our key assets. It is also a big step in our efforts to improve efficiencies across our terminals and transform our ports into world-class hubs,” Phillips said.

“Private sector participation in ports has the potential to positively influence efficiencies, export processes and global competitiveness.”

ICTSI’s senior vice president, Hans-Ole Madsen, said the collaboration underscored a shared commitment to revitalising South Africa’s maritime infrastructure

“Pier 2 is a strategic asset for South Africa, critical to trade, jobs, and economic growth. ICTSI is proud to invest in Durban’s future, bringing global expertise and technology to ensure DCT Pier 2 becomes a world-class terminal that benefits the entire region,” Madsen said.

“We look forward to getting started, working closely with Transnet to execute our shared vision.”

Jabu Mdaki, the CEO of Transnet Port Terminals (TPT), said the agreement comes at a critical time as Transnet pursues an extensive renewal of the national logistics system. Mdaki said private-sector participation would accelerate the operational improvements already underway.

“We are crowding in the private sector to invest in the operations. So we expect that from this agreement we will see the acceleration of the improvements that we had already started within Transnet to enhance operations and meet global performance standards,” he said.

“It is quite important because we do want this to be a catalyst to turn around Transnet as well as our operations. So by this matter being cleared by the court to proceed, it allows us to be where we are today and we do expect that this time next year the country will be seeing the impact of the significance of this day.”

Transnet board chairperson Andile Sangqu said the partnership is part of a broader programme to modernise the company’s logistics infrastructure and improve operational performance.

“It is a path to a more efficient and modern terminal. This private sector partnership will introduce global best practice, advanced systems and operational excellence. It is one of several opportunities that we are pursuing in order to improve efficiency, capacity and investment in South Africa's logistics network,” Sangqu said.

“This is our medium to long-term blueprint for transforming the organization into a reliable logistics provider that actively supports South Africa's growth aspirations. These PSPs inject the necessary technological advancement, financial resilience that will enable Transnet to fully recover and achieve the objectives of the re-event for growth strategy.”

BUSINESS REPORT