Durban Port to be partially privatised: Philippines’ ICTSI partners with Transnet to transform Africa’s largest harbour

South Africa’s national ports company, Transnet SOC Ltd., has chosen the Philippines’ International Container Terminal Services Inc. (ICTSI) as an equity partner to operate and expand Durban Container Terminal Pier 2, Africa’s biggest harbour. With almost 75% of the eastern port’s freight passing through this terminal, the move aims to reposition the Port of Durban as a container hub. Striving to improve its poor port performance and boost the economy, South Africa seeks private participation. ICTSI, led by Filipino billionaire Enrique Razon, will make an undisclosed upfront payment to Transnet, initiating a 25-year partnership to increase the terminal’s capacity and transform the port.

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Biggest African Port to Be Partially Privatised

By Antony Sguazzin

Africa’s biggest harbor will be partly owned and operated by the Philippines’ International Container Terminal Services Inc., a first for South Africa’s national ports company.

The company, known as ICTSI, has been selected as an equity partner to run and expand Durban Container Terminal Pier 2. Almost three quarters of the freight volume moved through the eastern port goes through the terminal and it accounts for 46% of South Africa’s total port traffic, according to state logistics company, Transnet SOC Ltd. 

This agreement “is a key catalyst for repositioning the Port of Durban as a container hub port,” Transnet said in a statement on Monday. 

South Africa is seeking to boost private participation in its ports, the poor performance of which is a drag on the economy. In a 2021 World Bank index of container port performance, Durban ranked 364th out of 370 and two other Transnet ports were in the bottom 10. 

Read more: Transnet seeks private boost for SA’s ports and Rail networks amid operational woes

Transnet will own a 50% plus one share in a new company that will manage the terminal for 25 years and will seek to boost its annual capacity to 2.8 million twenty-foot equivalent units, or TEUs, from two million, it said. TEUs are used to measure trade volumes at container ports. 

ICTSI, whose chairman and chief executive officer is Filipino billionaire Enrique Razon, will make an “up front” payment to Transnet for the stake, the South African company said in a response to queries, declining to give a figure. Razon is a major shareholder in ICTSI

Ultimately Transnet wants to boost Durban’s total container capacity to 11.4 million TEUs from 3.3 million. 

ICTSI, which operates terminals across six continents, was one of six bidders for the contract, Transnet said. 

An announcement on the port of Ngqura will follow, Transnet said.

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(Updates with ICTSI ownership and payment for stake in sixth paragraph)

© 2023 Bloomberg L.P.