A bidder has been selected for the upgrade of the Durban container terminal.
Transnet has selected Manila-headquartered International Container Terminal Services (ICTSI) as the preferred bidder for a joint venture to develop and upgrade the flagship Durban Container Terminal Pier 2.
Over a 25-year term, ICTSI will partner with Transnet Port Terminals (TPT) to develop and upgrade Transnet’s biggest container terminal, handling 72% of the Port of Durban’s throughput and 46% of South Africa’s port traffic.
The finalisation of the process follows approvals from government in terms of the Public Finance Management Act (PFMA), Transnet said on Monday.
“Private sector participation in Pier 2 is a key catalyst for repositioning the Port of Durban as a container hub port,” said Transnet Group CEO Portia Derby. “We are delighted to have a global player of ICTSI’s standing on board to drive this process.”
The partnership with ICTSI will help reposition the terminal for best practice performance, ensuring growth in volume throughput, and will support the terminal in providing operational and commercial support to access global shipping line call routes.
This will not only improve the logistics associated with servicing South African ports, but will play a significant part in stimulating exports and imports.
Transnet plans to grow Pier 2’s current capacity of 2 million TEUs (twenty-foot equivalent units) to 2.8 million TEUs.
This is aligned with plans by Transnet National Ports Authority (TNPA) to increase the current container capacity in the entire Port of Durban from 3.3 million TEUs to an eventual envisaged capacity of 11.4 million TEUs.
“The partnership in Pier 2 is a major step forward for our programme to bring in global expertise to improve efficiencies at our terminals, and bodes well for our ongoing plans to crowd in the private sector in areas identified for growth,” said Derby.
ICTSI is a publicly listed company and a leading independent global developer and operator of container terminals, which operates 34 terminal operations in 20 countries across six continents.
A total of 18 responses were received to Transnet’s initial call for request for interest and a total of 10 bids were shortlisted in response to a request for qualifications. Of the shortlisted respondents, six bidders submitted proposals.
In terms of the transaction, a new company will be formed to manage the operations at Pier 2, in which Transnet will have majority ownership of 50% plus one share. Pier 2 employees will be seconded to the new entity and will retain the same terms and conditions before and after the introduction of the private sector partner.