Lessons from DRC private partnership at state-owned ports
By Hans-Ole Madsen
The ability of International Container Terminal Services, Inc. (ICTSI) to successfully meet its R12 billion tender commitment to the Durban port has been underscored by its recently announced financial results for the quarter ending 31 March.
The company posted revenue from operations of $745 million (R1.3 billion) – a 17% increase year on year. The results highlight its financial muscle and ability to operate South Africa's largest container port in partnership with Transnet and to help unlock South Africa's economic potential.
In an affidavit filed at the Durban High court, Transnet CEO Michelle Phillips also admitted 'ICTSI plainly had and continues to have the necessary financial capacity.'
Yet the partnership between ICTSI and Transnet has been delayed by losing bidder Maersk who have stalled the process by pursuing a spurious legal action. Maersk's legal case hinges on their own narrow interpretation of a non-material single accounting measure, despite the tender process being thorough, fair and transparent.
Independent auditors oversaw the process. After the concession for the Durban Container Terminal Pier 2 was awarded, ICTSI's bid was subject to a further independent review.
ICTSI's financial clout to deliver on its commitment to Durban is further revealed when it estimates its capital expenditure for 2025 would be approximately $580m, a significant part of which will be channelled into expansions to port projects in the Philippines, Mexico, Brazil and the Democratic Republic of Congo.
In addition to serious financial flows, ICTSI has experience in upgrading and managing ports in a range of economies and developing nations. ICTSI currently runs 32 ports in 19 countries.
The Port of Matadi in the DRC is one such a success story that should be noted by those concerned about South Africa's struggling export and import economies. When ICTSI partnered with the government of the DRC to develop the port, it had been beset by years of congestion, inefficiencies, and ageing infrastructure.
Matadi is located on the Congo River and serves as the country's primary gateway for containerised and general cargo. Within two years of the public-private partnership with ICTSI, Matadi had undergone a remarkable transformation: a new terminal was built, vessel turnaround times were slashed, and trade flows into Kinshasa and the interior dramatically improved.
What had once been a chokepoint in the country's logistics chain became a symbol of what well-executed public-private partnerships can achieve, even in challenging environments.
This turnaround in the DRC is not an isolated success. It reflects the broader value that private sector participation can bring to state-owned assets - particularly in sectors like transport and logistics, where operational efficiency, technical expertise, and capital investment are crucial.
Across the globe, and especially in developing economies, public-private partnerships have proven to be a catalyst for infrastructure renewal, service improvement, and long-term competitiveness. In South Africa, where state-owned enterprises face mounting pressure to deliver under tight fiscal conditions, now is the time to lean into these partnerships.
ICTSI sees immense potential for South Africa's trade economy – and the Durban Container Terminal Pier 2 is the economy's beating heart. It handles 46% of all SA's port traffic and handles over 70% of the container throughput at the Durban harbour. And, as has been noted by many observers, the infrastructure of DCT2 has basically remained the same since 1963.
That is why ICTSI jumped at the opportunity to become the private partner of Transnet when the concession was first announced.
However, after almost two years, South African exporters and importers are still frustrated with the lack of progress at the Durban port. ICTSI has not been able to implement its agreement with Transnet, due to Maersk's court action.
Bottlenecks and backlogs are still causing costly delays in loading and unloading ships, as well as in processing cargo for onward transportation. Despite efforts to improve operations, inefficiencies persist.
Such delays come at a financial cost. Ships stuck at anchorage or slow-moving cargo means higher port and transport fees, increased fuel costs, and lost productivity for trucking companies waiting at terminals. These inefficiencies also create ripple effects throughout the economy, as this burden is passed onto on consumers. Essential commodities, from electronics to food and medical supplies, become more expensive, reducing affordability and hampering economic growth.
Addressing these challenges is critical, and a partnership with an experienced private operator will provide the expertise, investment, and efficiency needed to modernise port operations and drive economic recovery.
ICTSI is more than able to deliver on its R12bn commitment to partner with Transnet. It is also noteworthy that Maersk's bid for the Durban tender came in at R2bn below ICTSI's.
All parties involved now await the court's judgement.
It is a sobering thought that, were it not for Maersk's spurious case, DCT2 would by now have been well on its way to offer efficient services to shipping lines and South Africa's importers and exporters, contributing substantially to the country's economy.
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