Maersk has failed in its court bid to stop Transnet’s deal with the Philippines-based International Container Terminal Services Inc (ICTSI) to operate and modernise the Durban Container Terminal (DCT) Pier 2, South Africa’s busiest container facility.
On Friday, 10 October, the Durban High Court dismissed the Danish shipping and ports giant A.P. Møller-Maersk’s application, clearing the way for the long-delayed public-private partnership to move forward.
In a statement, ICTSI welcomed the judgment, calling it “an affirmation of a fair and transparent tender process.”
Transnet Group CEO Michelle Phillips also praised the outcome, saying the ruling “removes a major hurdle to the implementation of the transaction – we can now focus all our energy on executing our plan to modernise and expand DCT Pier 2.”
Court dismisses Maersk’s claims
The case was brought by APM Terminals, a Maersk subsidiary, which previously succeeded in temporarily interdicting Transnet from proceeding with the deal. The contract will see ICTSI acquire a 49% stake in DCT Pier 2, with Transnet retaining control. ICTSI won the 25-year concession after a competitive bidding process.
In its latest challenge, Maersk sought to have the tender set aside, alleging irregularities in the evaluation process — particularly around solvency requirements. The company claimed ICTSI was unfairly allowed to use market capitalisation instead of balance sheet equity to meet the solvency threshold.
However, Judge Mahendra Chetty dismissed the challenge, criticising Maersk for waiting until March 2024 — eight months after ICTSI was announced as the preferred bidder — to bring the case. The court found this to be an “undue delay”, ruling that Maersk’s application failed on that basis.
“The ruling brings a decisive end to a dispute that losing bidder Maersk brought on spurious legal grounds,” ICTSI said after the judgment.
ICTSI’s R11 billion offer stands
ICTSI noted that Maersk’s own bid was R2 billion lower than its winning R11 billion offer, arguing that the Danish firm’s legal challenge was effectively an attempt to overturn a fair process.
“The court found ICTSI was transparent about its calculation method and had provided ample credible evidence of its financial capacity to run the Durban Container Terminal,” ICTSI stated.
“The disagreement over a single ratio was not a basis to set aside the tender decision, given the weight of public interest in having an efficient port for the national economy.”
ICTSI regional head Hans-Ole Madsen said the company was “pleased that the court has reaffirmed the legality of the process” and confirmed its commitment to operate “with integrity and in full compliance with the law.”
A green light for port modernisation
ICTSI’s attorney, Andrew Pike of Bowmans, stated that the court found the solvency requirement alone was insufficient to invalidate Transnet’s award.
“We are delighted that the interdict preventing Transnet from proceeding with the award of the tender is gone, and we can now proceed with the project,” Pike said.
With the ruling now settled, ICTSI and Transnet can move forward with their public-private partnership, aimed at improving operations and addressing long-standing congestion at DCT Pier 2, which handles the majority of South Africa’s container traffic.
“The agreement will enable significant investment into skills and infrastructure at the port,” Madsen said. “We now look forward to working with Transnet and the shipping community to make operational improvements for the benefit of all stakeholders and the South African economy.”
Transnet eyes new era of efficiency
Phillips said the ruling confirmed the “integrity and transparency” of Transnet’s procurement processes and governance structures.
“It paves the way for us to finalise the implementation of this transaction without undue delay,” she said. “We remain committed to transforming our ports into world-class hubs that unlock new trade opportunities through the deployment of state-of-the-art equipment.”
Phillips added that while the legal delays were unfortunate, Transnet hopes “this unwanted delay is an isolated incident that will not set a precedent for future obstacles, particularly as we move forward with vital private sector participation transactions.”
The latest SA Trucking News straight to your inbox!
Do you have more on this story? Click to WhatsApp us. Anonymity guaranteed.
