Choice of billionaire Razon as Transnet partner is challenged

South Africa’s selection of Filipino billionaire Enrique Razon’s harbour firm as a partner to revive sub-Saharan Africa’s biggest container port is being questioned by losing bidders.

Read: Transnet selects Philippines-headquartered port operator for Durban Pier 2

Companies that lost out to International Container Terminal Services for the right to buy almost half of the main container terminal in the southeastern port city of Durban and operate it for 25 years have demanded to know why it won the deal.

“Some of the rival bidders have requested Transnet to provide the basis for the selection of ICTSI as the preferred bidder,” said state-owned Transnet, which operates all the main ports and freight-rail system. “The company is in the process of responding to any requests for information.”

A challenge from a rival bidder would present another obstacle to what’s expected to be South Africa’s first port privatisation. Labour union leaders this week said they’ve demanded that ICTSI agree not to cut any jobs for the duration of the 25-year contract and that they don’t expect their demand to be accepted.

Read: Labour unions imperil billionaire’s Durban Port terminal takeover

Transnet has said there were six bidders at the final stage. In an August 2022 statement, Transnet said 10 bidders had been short-listed.

APM Terminals BV, Cosco Shipping Ports, DP World and Global Port Services were among those that submitted bids.

China Harbour Co Engineering submitted a joint bid with Guangzhou Port Co and Grindrod Freight Services teamed up with Hamburger Hafen Und Logistik AG. Red Sea Gateway Terminal bid together with MMC Port Holdings Sdn Bhd, while Star Classic Investments bid with Abu Dhabi Ports and Remgro joined up with Terminal Investment.

Under the agreement, ICTSI will pay an undisclosed amount for almost half of Durban Container Terminal Pier 2 and help expand the facility, which accounts for three-quarters of the volumes that pass through the port and 46% of the nation’s total port traffic.

In a 2022 World Bank index of container-port performance, Durban ranked 341st out of 348. Two other Transnet harbours were also in the bottom 11.

ICTSI operates terminals across six continents.

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