Transnet picks ICTSI to overhaul South Africa’s key cargo terminal

Insider Spotlight

• Transnet and ICTSI sign long-term partnership for DCT Pier 2
• ICTSI, led by Filipino billionaire Enrique Razon, to run operations
• Deal aims to boost capacity, speed and South Africa’s trade competitiveness
  

South Africa’s Transnet has partnered with International Container Terminal Services Inc., the global port operator led by Filipino billionaire Enrique Razon, to modernize and operate Durban Container Terminal Pier 2 — the country’s most significant container gateway.

Why it matters

The partnership is a cornerstone of South Africa’s push to upgrade its logistics system by bringing in private-sector expertise. 

Pier 2 handles most of the nation’s containerized cargo, and improving its performance is essential to cutting logistics costs and supporting economic growth.

Driving the news

Under the 25-year agreement, the partners will create a special purpose vehicle, Newco, with Transnet keeping majority ownership while ICTSI manages terminal operations. 

ICTSI, selected as the preferred bidder in July 2023 after what Transnet described as a rigorous and transparent process, brings decades of experience operating ports in 19 countries. 

What the partnership means in practical terms

This partnership, detailed in a press release, means Transnet owns most of the new company, but ICTSI — which specializes in running ports around the world — will operate the terminal and help make it faster and more efficient. 

By adding new cranes, better technology and improved systems, ships can move in and out more quickly. That helps businesses get their goods sooner, reduces delays and makes South Africa more competitive in global trade.

What’s changing

The modernization plan includes new equipment and advanced technology that will expand Pier 2’s capacity from two million to 2.8 million TEUs (twenty-foot equivalent units). Performance improvements include:

• Increasing gross crane moves per hour from 18 to 28
• Doubling ship working hour from 60 to 120

These upgrades are expected to reduce vessel turnaround times, improve service quality and attract more cargo volumes.

What they’re saying

Transnet Group chief executive Michelle Phillips said: “Through our deliberate and expansive investment in new equipment across our terminals, the performance of DCT Pier 2 has been on an upwards trajectory. We expect that our partnership with ICTSI will further propel this crucial terminal to its full potential.”

ICTSI senior vice president Hans-Ole Madsen said: “This partnership marks a shared commitment to revitalizing South Africa’s maritime infrastructure and unlocking new opportunities for growth for South Africa and the entire region.”

The bigger picture

For Transnet, the partnership reinforces a broader strategy to modernize key national assets through private-sector participation. 

For ICTSI, it expands Razon’s global port footprint into one of Africa’s most strategic maritime corridors. — Princess Daisy C. Ominga | Ed: Corrie S. Narisma