AFRICA’S biggest harbor will be partly owned and operated by the Philippines’ International Container Terminal Services, Inc. (ICTSI), a first for South Africa’s national ports company.
The company has been selected as an equity partner to run and expand Durban Container Terminal Pier 2.
Almost three-quarters of the freight volume moved through the eastern port goes through the terminal and it accounts for 46% of South Africa’s total port traffic, according to state logistics company, Transnet SOC Ltd.
This agreement “is a key catalyst for repositioning the Port of Durban as a container hub port,” Transnet said in a statement on Monday.
South Africa is seeking to boost private participation in its ports, the poor performance of which is a drag on the economy. In a 2021 World Bank index of container port performance, Durban ranked 364th out of 370 and two other Transnet ports were in the bottom 10.
Transnet will own a 50% plus one share in a new company that will manage the terminal for 25 years and will seek to boost its annual capacity to 2.8 million twenty-foot equivalent units, or TEUs, from two million, it said. TEUs are used to measure trade volumes at container ports.
ICTSI, whose chairman and chief executive officer is Filipino billionaire Enrique K. Razon, Jr., will make an “up front” payment to Transnet for the stake, the South African company said in a response to queries, declining to give a figure. Mr. Razon is a major shareholder in ICTSI.
Ultimately, Transnet wants to boost Durban’s total container capacity to 11.4 million TEUs from 3.3 million.
ICTSI, which operates terminals across six continents, was one of six bidders for the contract, Transnet said.
An announcement on the port of Ngqura will follow, Transnet said. — Bloomberg