ICTSI selected for flagship Durban container terminal

DCT Pier 2 is Transnet’s biggest container terminal, handling 72 per cent of the Port of Durban’s throughput and 46 per cent of South Africa’s container traffic. The 25-year joint venture will have a major focus on the development and upgrade of the terminal with the objective of delivering superior standards of operation to waterside and landside-based customers.

The general intention is to reposition the terminal for best practice performance in turn delivering growth in throughput volume. ICTSI will support the terminal in an operational context as well as commercially in conjunction with liner operators.

Transnet points out the combined planned initiatives will play a significant part in stimulating exports and imports with this notably facilitated by lifting DCT Pier 2’s annual throughput capacity from two million to 2.8 million TEU/yr.

“The partnership in Pier 2 is a major step forward for our programme to bring in global expertise to improve efficiencies at our terminals, and bodes well for our ongoing plans to crowd in the private sector in areas identified for growth,” underlines Portia Derby, Transnet Group Chief Executive.

There was stiff competition to secure the opportunity. Transnet confirms it received 18 responses to its initial call for Expressions of Interest, in August 2021, nine of them from global terminal operators. Ten parties were subsequently shortlisted in response to a request for qualifications and of the shortlisted respondents, six bidders submitted proposals, before ICTSI was selected.

Key elements of the transaction include:

• A new company will be formed to manage the operations at DCT Pier 2, in which Transnet will have majority ownership of 50 per cent plus one share.
• The term of the transaction is 25 years, with an option to extend to a maximum of 30 years in the event that berth deepening of the North Quay at Pier 2 is delayed.
• Non-current assets will be transferred into the new company, together with customer and supplier contracts. The new company is required to achieve a minimum level 4 BBEE contribution status.
• The terminal operating licence and lease will be subcontracted to the new company, after seeking approval from Transnet National Ports Authority.
• DCT Pier 2 employees will be seconded to the new entity. There will be no retrenchments, and employees will retain the same terms and conditions before and after the introduction of the private sector partner.

Transnet is now working with ICTSI to implement the transaction through the execution of the legal agreements and ensuring compliance with all legal and regulatory matters.