ICTSI finally locks in deal to operate South Africa’s biggest port
Two years and a court battle later, tycoon Enrique Razon Jr.-led International Container Terminal Services Inc. (ICTSI) has finally secured a deal to take over operations of a major terminal at the Port of Durban in South Africa.
In a disclosure to the Philippine Stock Exchange on Thursday, ICTSI said it had signed a 25-year joint venture with Transnet SOC Ltd (Transnet), a South African state-owned company that owns railway, ports and pipelines infrastructure.
Under the deal, ICTSI will operate and develop the Durban Container Terminal Pier 2 (DCT2) at the Port of Durban, while Transnet will retain its majority stake in the new special-purpose vehicle, Newco.
The deal is worth about 11 billion rand or $647 million, according to a Bloomberg report. ICTSI is set to begin operating the terminal on Jan. 1, the two firms said in a joint statement.
“Pier 2 is a strategic asset for South Africa, critical to trade, jobs and economic growth. ICTSI is proud to invest in Durban’s future, bringing global expertise and technology to ensure DCT Pier 2 becomes a world-class terminal that benefits the entire region,” said ICTSI senior vice president Hans-Ole Madsen.
Increased capacity
With the agreement, ICTSI is expected to expand the capacity of the terminal to 2.8 million twenty-foot equivalent units (TEUs) from 2 million TEUs. It also aims to boost gross crane moves per hour to 28 from 18 and double ship working hours to 120 from 60.
These upgrades are expected to reduce logistics costs and improve service quality at DCT2, Transnet’s largest container terminal. This facility handles over 70 percent of the Port of Durban’s throughput and around 46 percent of South Africa’s port traffic.
It currently has 1,760 meters of operational quay length and 120 hectares of container storage and backup area.
“Through our deliberate and expansive investment in new equipment across our terminals, the performance of DCT Pier 2 has been on an upward trajectory,” said Michelle Phillips, chief executive of Transnet Group. “We expect that our partnership with ICTSI will further propel this crucial terminal to its full potential.”
ICTSI first secured the partnership in July 2023 after winning a bid involving 10 participants.
