International Container Terminal Services Inc. (ICTSI) won the bid to operate Durban Container Terminal 2 in 2023, planning to invest $580 million for a 49% stake. However, legal proceedings initiated by Maersk, the losing bidder, have delayed the port's development.
ICTSI's regional manager for Europe, the Middle East, and Africa, Hans-Ole Madsen, stated, "In 2023, ICTSI won the bid to operate the Durban Container Terminal 2 after a fair, rigorous and transparent process." He noted that the challenge by Maersk is stalling essential enhancements crucial for South Africa's economic progress.
A study by the Bureau for Food and Agriculture Policy (BFAP) highlighted that inefficiencies in rail and port operations cost the citrus industry $275 million for the 2024 season. The GAIN Group's 2023 study estimated losses at nearly $53 million daily, though some recovery is expected in 2024.
The World Bank ranks Durban and Cape Town among the least efficient ports globally, underscoring the urgent need for investment and expertise. Madsen emphasized the importance of private-public partnerships to improve operations, training, and equipment at Durban's Container Terminal 2. "The level of immediate investment needed can only be accomplished through a private-public partnership," he said.
Transnet, the state-owned rail and port operator, is undergoing reforms to allow private-sector involvement. Madsen remarked that Maersk's participation might prioritize its own interests, whereas ICTSI advocates for an independent operator to ensure fairness for all users. He added, "When the agreement between ICTSI and Transnet goes ahead, Transnet will receive a $580 million cash injection."
Source: Moneyweb