Largest African port is partially privatized

By Antony Sguazzin (Bloomberg) —

Africa’s largest port will be partially owned and operated by the Philippines’ International Container Terminal Services Inc., a first for South Africa’s national ports company.

The company known as ICTSI has been selected as the equity partner for the operation and expansion of Durban Container Terminal Pier 2. Almost three quarters of the volume of freight transported through the Eastern Port passes through the terminal and it accounts for 46% of South Africa’s total volume of port traffic, according to state-owned logistics company Transnet SOC Ltd.

This agreement “is an important catalyst in the repositioning of the Port of Durban as a container hub port,” Transnet said in a statement on Monday.

South Africa is trying to increase private ownership of its ports, whose poor performance is hurting the economy. In a 2021 World Bank container port performance index, Durban was ranked 364th out of 370 and two other Transnet ports were in the bottom 10.

Transnet will own 50% plus a stake in a new company that will manage the terminal for 25 years and seek to increase its annual capacity from 2 million to 2.8 million 20-foot equivalent units (TEUS), it said . TEUs are used to measure trade volume in container ports.

Ultimately, Transnet wants to increase Durban’s total container capacity from 3.3 million to 11.4 million TEU.

ICTSI, which operates terminals on six continents, was one of six bidders for the contract, Transnet said. It has not been specified if ICTSI will pay its share or if it will have to fund the expansion.

An announcement on Ngqura Port will follow, Transnet said.

© 2023 Bloomberg LP

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