Durban, South Africa – The recent selection of International Container Terminal Services (ICTSI), owned by Filipino billionaire Enrique Razon, as a partner to revive sub-Saharan Africa’s largest container port has sparked controversy among losing bidders. Companies that were unsuccessful in their bids to acquire almost half of the main container terminal in Durban and operate it for the next 25 years have raised questions about the basis for ICTSI’s selection.
Transnet, the state-owned company that operates major ports and the freight-rail system, confirmed that some rival bidders have requested information regarding the selection process. “The company is in the process of responding to any requests for information,” stated Transnet. This scrutiny adds an additional challenge to what is anticipated to be South Africa’s first port privatization.
At the final stage of the bidding process, Transnet disclosed that six bidders were in contention. However, an earlier statement from August 2022 had short-listed 10 bidders, including APM Terminals BV, Cosco Shipping Ports Ltd., DP World Ltd., and Global Port Services Ltd.
The controversy surrounding the ICTSI selection is expected to intensify, as labour union leaders have demanded job security for the 25-year contract duration. They have urged ICTSI to commit to not cutting any jobs during this period, though the likelihood of the demand being accepted remains uncertain.
Under the terms of the agreement, ICTSI will acquire nearly half of the Durban Container Terminal Pier 2 and participate in expanding the facility. This terminal currently handles three-quarters of the port’s total volume and accounts for 46% of the nation’s overall port traffic.
The decision to partner with ICTSI comes as Durban’s port faces challenges in container-port performance, ranking 341st out of 348 in the 2022 World Bank index. Two other Transnet harbors were also ranked in the bottom 11. The partnership aims to leverage ICTSI’s global expertise, as the company operates terminals on six continents.