Transnet and ICTSI sign a 25-year deal to modernize Durban's Pier 2, enhancing capacity and efficiency amid port reform efforts.
South Africa's state-controlled Transnet has entered into a 25-year partnership with Manila's International Container Terminal Services Inc (ICTSI) to modernize Durban's Pier 2, as reported by Geneva's Ecofin Agency.
Signed on December 10, the agreement establishes a new entity, Newco, in which Transnet will maintain a majority stake while ICTSI will manage terminal operations. This partnership is part of South Africa's broader port reform program aimed at alleviating congestion and improving operational efficiency.
The deal follows a legal challenge from Maersk's APM Terminals, which sought to overturn ICTSI's concession awarded in July 2023. However, the KwaZulu-Natal High Court dismissed the case in October, paving the way for the project to proceed.
Transnet has indicated that private investment will be utilized to fund new equipment and advanced technology, increasing the terminal's capacity from two million to 2.8 million TEU. Additionally, crane productivity is expected to rise from 18 to 28 moves per hour, while vessel working hours are projected to double from 60 to 120.
The Durban Container Terminal is critical, handling 72 percent of Durban Port's throughput and 46 percent of South Africa's container volumes. However, it has faced chronic congestion and declining productivity, with the World Bank's Container Port Performance Index ranking South African ports among the lowest of the 403 assessed.
This project in Durban is part of a larger restructuring initiative aimed at attracting private capital across major ports, including those in Cape Town, Richards Bay, and Ngqura.
