News / ICTSI chief slams Maersk legal bid to overturn Durban terminal concession win

ID 24771251 © Hongqi Zhang (aka Michael Zhang) | Dreamstime.com

Amid a fresh wave of congestion at South Africa’s ports, ICTSI chairman Enrique Razon has hit out at Maersk, which is disputing the Filipino terminal operator winning a concession at Durban.

In March, South African state-owned rail and port operator Transnet announced that ICTSI was the preferred bidder for the 25-year concession to operate the Pier 2 terminal, which handles around 72% of Durban’s container traffic and 42% of the country’s box throughput.

However, after Maersk subsidiary APM Terminals launched legal action questioning the legality of the tender process, last month a court judgment interdicted Transnet “from negotiating, concluding and implementing the contract award”.

A secondary part of the APMT suit asked the judge to set aside the concession award entirely, but this part has not been heard yet.

Mr Razon this week lambasted the case, claiming Maersk was using it as a way of dominating the South African container market.

He said: “This was a well-run, rigorous and transparent tender process, despite what Maersk has attempted to make people believe.

“ICTSI is one of the largest terminal operators in the world, and is, from an EBITDA standpoint, larger than Maersk’s APM Terminals.

“We outbid Maersk by $100m, and they are attempting to use a non-essential technicality to ensure that the government of South Africa does not succeed with part of its economic agenda. This of course suits Maersk, who have just as much interest in the process failing as they do in having their far inferior bid being accepted.

“Either outcome would be a dramatic step backwards for the government’s economic agenda, but a success for Maersk’s desire for end-to-end control of South Africa’s logistics system,” he added.

Transnet said it would abide by the judgment and that it “remains committed to finding a speedy resolution to this matter, in the interests of the company and the South African economy”.

However, Mr Razon also questioned this. He said: “Transnet has not acted expeditiously and has dragged its feet at the highest levels.

“We believe that there are possibly elements in the organisation that do not want the process to succeed, despite it not being a secret that South African businesses are suffering more than ever from inefficiencies in the ports.

“Volumes are down dramatically, and container port profitability is down significantly. To be blunt, it will take even more work to resurrect the value of a business that has substantially declined since the tender was launched.”

In a customer advisory today, Maersk said vessel waiting time at Durban’s Pier 2 was now three-to-four days and warned that mounting congestion elsewhere in the region was also hitting South Africa’s container supply chains. Despite civil unrest hitting Mozambique, its ports of Maputo and Beira remained operational, but the Lebombo border crossing into South Africa had closed, “due to violent action”, and truck queues were growing on the South Africa side.

Meanwhile, political unrest in Mauritius has hit operations at the transhipment hub of Port Louis, which Maersk periodically uses as a ‘pressure release valve’ when congestion in South Africa mounts, and the carrier said vessel waiting times were between three and five days.

According to the eeSea liner database, 78% of vessels now at Port Louis are awaiting a berth, while at Beira that figure is 83%.