Razon, the chair of ICTSI, also warned these setbacks threaten much-needed private investments for Durban Container Terminal Pier 2, one of the continent’s largest ports.
“Maersk is clearly desperate to prevent the entry of an independent common user terminal operator. In short, after failing to produce a strong bid, they are instead trying to delay and stop the process by using the courts,” Razon said in a statement on Monday.
“We are more and more concerned that as these delays continue, there is a diminishing commitment within Transnet towards this private partnership. Transnet has not acted expeditiously and has dragged its feet at the highest levels,” he added.
Preferred bidder
ICTSI was last selected by Transnet SOC Ltd. as the preferred bidder for the 25-year joint venture to develop and operate the terminal.
Durban Container Terminal Pier 2, the largest terminal in the Port of Durban, handles 72 percent of the port’s throughput and 46 percent of South Africa’s total port traffic.
Superior bid
“ICTSI is one of the largest terminal operators in the world and is, from an [earnings before interest, taxes, depreciation and amortization] standpoint, larger than Maersk’s APM Terminals,” Razon said.
“We outbid Maersk by $100 million and they are attempting to use a non-essential technicality to ensure that the government of South Africa does not succeed with part of its economic agenda,” he added.
Razon said the bidding process was rigorous and transparent “despite what Maersk has attempted to make people believe”.
Vague qualification
Razon also called out Maersk’s attempt to exploit unclear qualification requirements.
“Maersk is now trying to question a non-defined metric that many of the largest public corporations in the world could not meet, including Apple Computer,” Razon said.
“It is also not possible for as many as 40 percent of the top 40 companies on the Johannesburg Stock Exchange, including South Africa’s largest banks and insurers,” he added.
Delays threaten project viability
“To be blunt, it will take even more work to resurrect the value of a business that has substantially declined since the tender was launched,” Razon said.
“It is, therefore, extremely disappointing that further delays are forthcoming. While we have great respect for the judiciary and the strength of the South African legal system, we believe that serious bias has occurred, and that Transnet’s reputation has been used to derail the process,” he added.
