Tender process for Transnet's Durban Container Terminal 2 was rigorous and transparent
International Container Terminal Services Inc. (ICTSI) was announced as the preferred bidder for the Durban Container Terminal 2 almost two years ago. However Transnet, ICTSI and Maersk, the losing bidder, are engaged in a legal battle which returns to court at the end of April.
Image: Leon Lestrade/ Independent Newspapers
IT HAS been almost two years since Transnet announced International Container Terminal Services Inc. (ICTSI) as the preferred bidder for the Durban Container Terminal 2, and exactly a year after this was reaffirmed by independent third-party financial consultants who verified the rigour and fairness of the tender process.
Yet the implementation of the public/private partnership between Transnet and ICTSI is still in the balance, costing the South African economy billions in lost opportunities. The delay is a result of the losing bidder Maersk seeking to nullify Transnet's awarding of the contract to ICTSI on entirely spurious grounds
The Durban Container Terminal Pier 2 concession process was a rigorous, transparent, and competitive bidding exercises – on par with best-in-class processes that ICTSI has taken part in across the world.
ICTSI is a multinational specialist company that successfully runs port operations across 32 ports in 19 countries. It operates in some of the world's largest and most dynamic economies, including China, Brazil, Indonesia, the Philippines, Argentina and Australia as well in smaller, complex jurisdictions such as Madagascar and the Democratic Republic of Congo.
ICTSI's global revenues for the 2024 financial year rose 15% to $2.74 billion (R50 billion), and net income for the year rose 66% to $849.8 million (R15.54 billion).
In an attempt to subvert the outcome of the bidding process, losing bidder Maersk has not only lodged a legal challenge on meritless grounds, but it also waited almost a year after the announcement was made before launching the challenge.
Hans-Ole Madsen the Regional Head of International Container Terminal Services Inc. says they are ready to implement critical improvements at the container terminal, enhancing the efficiency and reliability of one of South Africa's most important trade gateways.
Image: Supplied
Their argument? That ICTSI should not have passed the earlier Request for Qualification (RFQ) stage based on their own interpretation of one financial metric, a metric that even more to the point was never a pass/fail test in any portion of the process.
The process leading up to the awarding of the container terminal concession was extensive and methodical. It began with a Request for Interest on August 17, 2021, followed by the issuance of a Request for Qualification by the Transnet Board of Directors on February 11, 2022, inviting potential partners for a 25-year special purpose vehicle to operate the Durban container terminal.
The closing date for RFQ submissions was April 12, 2022. During this submission, ICTSI (as well as all interested parties) disclosed its financial standing, including the now-contested solvency metric.
By August 9, 2022, the Transnet Board had evaluated all applicants and shortlisted ten qualified entities, including ICTSI and Maersk's subsidiary, APM Terminals. At this stage, Transnet's auditors had no concerns regarding ICTSI's financial eligibility. The shortlisted bidders were then invited to submit formal proposals.
When the final bids were assessed, ICTSI emerged as the clear winner, offering $618 million (approximately R12 billion) for the concession, while Maersk bid $515 million (R9.2 billion). ICTSI also scored 100% on Transnet's evaluation, compared to Maersk's 83%.
Based on these results, Transnet's Board approved ICTSI as the preferred bidder on April 11, 2023, and the decision was made on July 3, 2023. Maersk was officially notified of its unsuccessful bid three days later, and the announcement was made public on July 18, 2023.
After July 2023, Transnet commissioned external consultants to do a further round of assessment on ICTSI – over and above the legal requirements of the tendering process. The independent third-party consultants, GrowthStone, found that:
'Based on the financial due diligence review, ICTSI is expected to be a robust participant in the Durban Container Terminal Pier 2 private sector participation project. From a financial risk standpoint, the company is in a very strong position to add value to the project while being able to withstand volatilities in both global and local markets through its strong balance sheet, well-diversified business portfolio, and extensive access to capital across a broad range of sources. Coupled with effective capital management practices and a well-crafted gearing strategy, ICTSI is positioned to be a strong and reliable strategic partner to Transnet in the [Durban Container Terminal Pier 2] operation.'
On the basis of this, Transnet reaffirmed ICTSI's selection as the preferred bidder.
Maersk only then filed an urgent interdict on March 11, 2024 based on ICTSI's solvency ratio — some nine months after the final decision had been made and almost two years since the RFQ notice.
Maersk misleadingly framed its challenge as though Transnet had only confirmed ICTSI's bid in March 2024, when in fact, the process had been concluded nine months prior. This legal manoeuvre appears to be nothing more than an attempt to disqualify ICTSI on an arbitrary technicality, disregarding the fact that ICTSI's bid was superior both in financial and operational terms.
ICTSI used a recognised industry method to calculate solvency during the RFQ process, based on market capitalisation, which is widely accepted in financial evaluations. Maersk is now attempting to impose its own choice of definition of solvency—one that would disqualify even some of the world's largest corporations, including Apple, for the same bidding process.
Moreover, financial solvency is just one metric among many used to assess a company's financial capacity to execute a major investment project. ICTSI has a proven track record of running successful port operations globally, and its financial standing is robust. Attempting to reduce its capability to a single financial ratio is both misleading and disingenuous.
The ongoing legal dispute has significant consequences for South Africa's trade efficiency. Transnet is upgrading equipment at the Durban harbour, but the port needs a world-class operator to drive efficiency, transparency, and competitiveness. Unlike Maersk, ICTSI is not vertically integrated into shipping and port operations, making it an impartial player that can fairly serve all shipping lines using the Durban container terminal.
Every delay caused by Maersk's legal challenge impacts South Africa's exporters and importers, stalling much-needed improvements at the terminal. If Maersk succeeds in disqualifying ICTSI in favour of its own bid, Transnet stands to lose R2 billion in investment, an outcome that would be entirely unjustifiable given the integrity of the bidding process.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

IOL News
6 hours ago
- IOL News
News you should know tonight: Top 5 stories you may have missed on June 11, 2025
Embattled power utility Eskom has revealed that 87% of municipalities approved for National Treasury's municipal debt relief program are failing to meet the conditions required for debt write-offs, with only 10 out of 71 municipalities remaining compliant. Good evening, IOL News family! It's Tuesday, June 3, 2025, and it's time for a wrap of the biggest headlines making waves in South Africa and beyond. Don't forget to join the IOL WhatsApp Channel to stay in tune, informed, and in the know. Death toll from Eastern Cape floods rises to 49, confirms Premier Mabuyane The death toll from the devastating floods in the Eastern Cape has climbed to 49, Premier Oscar Mabuyane confirmed during a media briefing on Wednesday, describing the situation as one of the most painful tragedies to hit the province in recent years. To read on, click here. Most municipalities flouting Eskom debt relief terms, warns utility Embattled power utility Eskom has revealed that 87% of municipalities approved for National Treasury's municipal debt relief program are failing to meet the conditions required for debt write-offs, with only 10 out of 71 municipalities remaining compliant. To read on, click here. Municipalities in fiscal turmoil as appropriations committee scrutinises financial mismanagement The Standing Committee on Appropriations has raised an alarm over the dire financial state of metropolitan municipalities during a recent engagement with the Mangaung Metropolitan Municipality in the Free State, as part of discussions surrounding the 2025 Division of Revenue Bill. To read on, click here. R32 million spent on Gauteng road upgrade 'that only exists on Google Maps' The Gauteng provincial roads and transport department is under fire after revealing spending over R32 million upgrading a stretch of Evaton Road in the Vaal, yet the area has nothing to show for it. To read on, click here. Your Netflix package just got more expensive in 2025 - this is how much you will pay South African Netflix users will once again have to dig deeper into their pockets, as the global streaming giant has increased the prices of its Mobile, Standard, and Premium plans in the country. To read on, click here. Get your news on the go, click here to join the IOL News WhatsApp channel. IOL News

The Star
6 hours ago
- The Star
Cyril Ramaphosa and Donald Trump to discuss trade relations at G7 Summit
Mashudu Sadike | Published 5 hours ago President Cyril Ramaphosa is set to meet with US President Donald Trump on the sidelines of the Group of Seven (G7) Summit in Canada this weekend. The meeting will focus on key issues, including the African Growth and Opportunity Act (AGOA) and US-SA tariffs. Ramaphosa's meeting with Trump comes after South Africa submitted a revised framework proposal to the US, aiming to expand trade and investment relations between the two countries. The US imposed tariffs on South African imports in April, with a 90-day pause on reciprocal tariffs of 30% against South African exports. The tariffs were part of a broader set of 'liberation day' tariffs imposed by Trump on all US trading partners. However, they were later reduced to a base rate of 10%, with the expectation that countries would use the 90 days to propose solutions addressing the US's trade deficit concerns. Ramaphosa's meeting with Trump will be his second in about three weeks, following their encounter at the White House last month. During their previous meeting, Ramaphosa emphasised the importance of the US's role in the G20 Summit and invited Trump to attend the G20 Leaders' Summit in Johannesburg later this year. Trump agreed to attend, and Ramaphosa sees this as a positive development for bilateral relations. According to sources close to Ramaphosa, the meeting agenda will include discussions on AGOA, providing duty-free access to the US market for some African products. The agreement is set to expire in September, and South Africa is eager to see it renewed. Ramaphosa will also raise concerns about US-SA tariffs, urging the US not to increase them beyond the current 10% if negotiations on a new trade framework are not concluded by July 9. The sources further said the meeting between Ramaphosa and Trump was significant, given the current state of US-SA trade relations. 'The business sector has expressed concerns about the rise of tariffs, and Ramaphosa is under pressure to come up with answers. A successful meeting could help to ease tensions and pave the way for improved trade relations between the two countries,' the source added. Presidency spokesperson Vincent Magwenya had not responded to questions as to what to expect at the upcoming meeting. However, Ramaphosa, while speaking to journalists on Tuesday after he announced the date for the National Dialogue on various issues affecting the country, confirmed that he would be meeting Trump, Canadian Prime Minister Mark Carney, and German Chancellor Friedrich Merz. Ramaphosa said he was invited by Carney, who holds the presidency of the G7, and would also use the opportunity to talk about the G20 Summit to be hosted by South Africa in November, where Trump will take over the presidency. 'We're going to use it as a platform to begin to consolidate what we want to achieve in November when the leaders' summit takes place here (in Johannesburg),' he said. Last month, Ramaphosa and his delegation included Minister of Trade and Industry Parks Tau, Minister in the Presidency Khumbudzo Ntshavheni, Agriculture Minister John Steenhuisen, and International Relations Minister Ronald Lamola. His goals for that meeting included resetting US-SA relations and beginning serious engagement with the US on trade and investment. He emphasised that South Africa did not 'go kowtowing' to the White House but rather took the initiative to engage with the US. 'For us, it's important for us as a nation to reposition ourselves in the very turbulent geopolitical architecture or situation that we have,' Ramaphosa said at the time. Business Unity South Africa could not respond to inquiries regarding expectations of Ramaphosa's upcoming meeting, citing the absence of its CEO, Khulekani Mathe, who is in Switzerland on a work visit. [email protected]

IOL News
6 hours ago
- IOL News
Employer groups seek urgent interdict against Employment Equity regulations
The Department of Employment and Labour is forging ahead with the implementation of the Employment Equity Amendment Act. Image: Leon Lestrade/ Independent Newspapers The National Employers' Association of South Africa (Neasa) and Sakeliga have officially notified the Minister of Employment and Labour, Dr Nomakhosazana Meth, of their intent to seek an urgent interdict against the contentious Employment Equity (EE) regulations. This comes after the department published two sets of EE Regulations on 15 April - the General Administrative Regulations, and Regulations on Sector Numerical EE Targets - following the commencement of the Employment Equity Amendment Act, No. 4 of 2022, on 1 January 2025. The proposed regulations mandate employers to adhere to strict hiring quotas based on race, sex, and disability, with penalties for non-compliance reaching up to 10% of a company's turnover. Section 15(A) of the Equity Employment Amendment Act empowers the minister to set numerical targets. According to the Act, the Minister may, after consulting the relevant sectors and with the advice of the Commission for Employment Equity (CEE), for the purpose of ensuring the equitable representation of suitably qualified people from the designated groups at all occupational levels in the workforce, by notice in the Government Gazette set numerical targets for any national economic sector identified in terms of subsection (1). Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Neasa on Wednesday said the urgency of this interdict stemmed from concerns voiced by the associations about the potential for these regulations to inflict irreparable harm on both public and private sectors. Neasa and Sakeliga argue that the minister's plan risks the allocation of resources ineffectively in a futile attempt to meet what they describe as 'impossible' compliance requirements. Under the proposed framework, companies would be required to categorise themselves into one of 18 economic sectors and adjust their workforce composition according to a series of demographic quotas. These quotas, referred to as 'numerical sectoral targets,' highlight a drastic shift in hiring practices, where businesses are instructed to limit appointments or promotions of employees from so-called over-represented groups, which includes many white male staff members. The end goal of these targets is to ensure that every single designated business (50 or more employees) in South Africa, regardless of industry, has a workforce that is representative of the racial and gender demographic composition of the country. The 2025 CEE Annual Report shows that at Top Management, the White population representation at 61.1% is approximately eight times their Economically Active Population (EAP), and the Indian population representation at 11.9% is more than four times their EAP at the Top Management level. In contrast, said the report, the African population representation is at 18.0%, which is approximately four times below their EAP, and the Coloured population representation at 6.2% is below their EAP at this occupational level. The CEE Report concludes that the lack of equitable representation at the Top Management level does not bode well for the future sustainable economic growth of the country and the representation of the demographic population distribution in the workplace in terms of population groups, gender, and disability. The Report said that at the Senior Management level, the picture remains appalling for the Africans, with the White and Indian Population representation remaining significantly higher than their EAP. However, critics of the regulations, including Neasa and Sakeliga, maintain that the measures contravene established constitutional rights and impose unachievable demands on employers. The economic repercussions, they argue, could be dire, potentially leading to significant job losses and overwhelming legal uncertainties that would disrupt business operations across the board. "The regulations and the Employment Equity Act (as amended in 2023) establish unlawful, unconstitutional, and impossible demands. Their consequence would be severe financial harm to businesses and extensive social harm through economic disruption, increased unemployment, and legal uncertanty," Neasa said. "We informed the minister that, in addition to our urgent application against the 2025 administrative regulations and sectoral targets, we also intend to challenge the Employment Equity Act on additional grounds."