The court dispute between ICTSI, Transnet and Maersk over Durban Container Terminal is finally moving to a conclusion
The court case brought by shipping giant Maersk against International Container Terminal Services (ICTSI) and South African rail and port operator Transnet is finally being heard in the KwaZulu-Natal High Court today (12 March).
ICTSI claims that the case is based on “spurious claims” that ICSTI should have been disqualified from bidding for the contract to run the Durban Container Terminal Pier 2 (DCT2) on a misleading technicality.
ICTSI says the claims by losing bidder Maersk are not grounded in fact or the law. In 2024, following a rigorous and transparent tender process, Transnet awarded the contract to run the Durban Container Terminal Pier 2 to ICTSI.
The matter of contesting the awarding of the bid to ICTSI has been in and out of court for almost a year, delaying the process of finding an equity partner for Transnet at Pier 2 of the Durban Container Terminal.
The ongoing delay has been a cause of great concern for the fruit export industry which has been promoting private-public partnerships in South African ports.
According to a statement by ICTSI, the company plans to spend R11bn to upgrade the terminal, more than 20 per cent higher than the next bidder, which was Maersk.
Maersk is arguing that ICTSI did not deserve to be the successful bidder due to how ICTSI calculated its solvency ratio, raising questions about its ability to perform on the contract in the short and long term.
The objective of the tender was to show that the firm has sufficient financial capacity to undertake the project at hand, ICTSI noted.
“Maersk has never questioned ICTSI’s financial capacity, but is arguing that a non-material financial technicality should disqualify ICTSI,” the company points out.
Although Transnet’s documentation did not specifically define the components of the prescribed solvency ratio equation, ICTSI fully disclosed the definition of the measure it used based on market capitalisation. The metric used by ICTSI is a well-accepted benchmark, as evidence by the fact that Transnet’s auditors reviewed and accepted this measure during the bidding process.
Before the announcement of ICTSI as preferred bidder, Transnet asked GrowthStone, a third-party management consulting firm, to review ICTSI, including its financial position and the calculation of its solvency.
GrowthStone’s review was included in ICTSI’s court filings.
“Based on the financial due diligence review, ICTSI is expected to be a robust participant in the Durban Container Terminal Pier 2 private sector participation project,” GrowthStone said.
”From a financial risk standpoint, the company is in a very strong position to add value to the project while being able to withstand volatilities in both global and local markets through its strong balance sheet, well-diversified business portfolio, and extensive access to capital across a broad range of sources.
”Coupled with effective capital management practices and a well-crafted gearing strategy, ICTSI is positioned to be a strong and reliable strategic partner to Transnet in the DCT2 operation.”
Observers in the South African export fruit sectors say they are looking forward to the matter being resolved so that vital new developments in solving the country’s ongoing port problems can be resolved.
