…By Roland Peterson for TDPel Media.
Transnet’s Selection of ICTSI to Manage Durban Container Terminal Pier 2
Transnet, a South African state-owned company, has chosen International Container Terminal Services Inc (ICTSI), a company based in the Philippines, to operate its largest container terminal in Durban for the next 25 years.
This decision comes after a rigorous selection process, which saw ICTSI emerge as the preferred partner to develop and upgrade Durban Container Terminal Pier 2.
Government Approval and ICTSI’s Global Presence
The finalization of this partnership was made possible by the approval of the South African government in accordance with the Public Finance Management Act.
ICTSI, recognized as one of the largest independent container terminal operators globally, currently operates 20 terminals worldwide.
Their extensive experience and global presence played a significant role in Transnet’s decision.
Enhancing Efficiency and Promoting Trade
Portia Derby, the Chief Executive of Transnet Group, expressed her confidence in the partnership with ICTSI.
She believes that working together will enable Pier 2 to adopt best performance practices, leading to improved efficiency.
Additionally, this collaboration is expected to stimulate both imports and exports, thereby benefiting the overall trade ecosystem.
Key Contract Terms and Conditions
The transaction between Transnet and ICTSI entails several important elements.
First, a new company will be established to manage the operations at DCT Pier 2, with Transnet retaining majority ownership of 50% plus one share.
The initial term of the agreement will be 25 years, with an option to extend it to a maximum of 30 years if the deepening of the North Quay at Pier 2 experiences delays.
The transfer of non-current assets, customer and supplier contracts, and achieving a minimum level 4 BBEE (Broad-Based Black Economic Empowerment) contribution status are among the key requirements of the new company.
Furthermore, the terminal operating license and lease will be subcontracted to the new entity, pending approval from Transnet National Ports Authority.
Importantly, the transition to the private sector partner will not result in job losses or changes to the terms and conditions of DCT Pier 2 employees, as they will be seconded to the new company while retaining their existing employment conditions.
Conclusion
Transnet’s selection of ICTSI as the partner to manage Durban Container Terminal Pier 2 marks a significant milestone in their efforts to enhance operational efficiency through collaboration with global experts.
The formation of a new company, the transfer of assets and contracts, and the retention of employees ensure a smooth transition while promoting growth and development in the container terminal sector.
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