Parastatal Transnet believes it did everything according to the book when it appointed International Container Terminal Services Incorporated (ICTSI) to take over Pier 2 of the Durban Container Terminal.
The port handles two terminals, Pier 1 and Pier 2, with the latter handling close to 70% of South Africa’s container volumes.
Part of the deal was that ICTSI, a container giant from the Philippines, would acquire 49% of the terminal. The investment value totalled R11bn. The arrangement between Transnet and ICTSI would go on for 25 years.
Just when the two entities had concluded the deal, APM Terminals, a global leader in the management and operation of ports, lodged a court application wanting the ICTSI agreement to be nullified.
The Netherlands consortium, headquartered in The Hague, approached the Durban High Court on an urgent basis, seeking a review and for the awarding of the tender to be set aside.
The APM Terminals contended that ICTSI should have never been considered for the tender, citing insolvency among other grounds.
The consortium was successful in its bid to put the tender on ice. However, the
matter is far from over as the court battle continues with ICTSI putting on a court fight of its own.
Michelle Phillips, Transnet Group chief executive officer told Sunday World that the show will continue despite the court setback.
“We are being challenged on a very tactical point. It’s not whether the contract was awarded fraudulently or corruptly. The challenge is whether ICTSI had the
required solvency ratio or not.
“Our experts believe that you can measure solvency in different ways. We have concluded our due diligence and it indicated that ICTSI has the financial capability to implement this thing and to proceed with it. But again, the court will decide,” she said.
She further explained that there was nothing untoward about the deal.
“I was not personally involved in it. But if there was something untoward, they would have raised it in court,” Phillips told Sunday World.
The parastatal recently announced it had acquired 20 straddle carriers and nine rubber-tyred gantries, which will enhance its operations at DCT Pier 2 and Pier 1.
It said the new fleet is part of TPT’s R3-billion investment to boost equipment availability and operational efficiencies across its container terminals.
