INTERNATIONAL Container Terminal Services Inc. (ICTSI) said it is disappointed by today’s decision by the KwaZulu-Natal High Court to deny ICTSI’s application for leave to appeal an interdict which temporarily stops Transnet from implementing the public-private partnership agreement with ICTSI. The agreement to operate the Durban Container Terminal Pier 2 was awarded to ICTSI after what it calls a “rigorous, transparent, and fair bidding process” in 2023 which was interdicted in March 2024.
ICTSI said the denial of the right to appeal the interdict was not wholly unexpected as Transnet had chosen not to appeal the Interdict. The interdict was granted against Transnet, stopping the state-owned entity from implementing the private-public partnership pending a full court review next year, making it challenging for ICTSI to be granted leave to appeal the interdict.
ICTSI said it felt that it had no choice but to challenge the interdict. In its view, the legal judgment which led to the awarding of the interdict contained legal errors that are damaging to ICTSI’s reputation.
Maersk, through its subsidiary APM Terminals, is one of the failed bidders and approached the courts this year to overturn the contract on what ICTSI has called “a non-material technicality”.
In October the KwaZulu-Natal High Court ordered Transnet to halt further implementation of the agreement until the matter could be considered in court.
ICTSI says that the reasoning underpinning the interdict stems from a fundamental misunderstanding of the technical financial metrics at the heart of the matter, and the evidence provided by Transnet and ICTSI to the court was not considered. ICTSI believes that the denial of leave to appeal represents a missed opportunity to rectify errors, but will continue to vigorously defend its position when the main case is heard in March 2025.
ICTSI says Maersk has misleadingly argued that ICTSI does not meet a technical definition of solvency – a metric used to show its financial ability to meet its obligations. ICTSI disputes Maersk’s narrow interpretation of how solvency should be calculated and argues that its measure of solvency is adequate given the tender did not prescribe how this metric must be calculated.
“ICTSI adequately proved its financial capacity to perform on the terms of the contract during the bidding phase. Transnet and their auditors were satisfied with this when it took the decision in July 2023 and in a second independent review in 2024,” said Hans-Ole Madsen, ICTSI’s regional head for Europe, Middle East and Africa. “We remain resolute in our belief that the main case will demonstrate the strength of our financial position.”
ICTSI said despite losing the right to appeal the temporary interdict, the company remains confident in the merits of its case and looks forward to presenting its arguments when the full review of the case is heard in March 2025.
In Judge Mossop’s ruling in APM Terminals BV’s application delivered in October 2024, it was said that, as part of ICTSI successful bid, the company had committed itself to paying US$618 million (approximately R11.1 billion) to Transnet for a minority shareholding in the new joint venture company. APN Moller was ranked second behind ICTSI, having offered approximately R2 billion less than the amount that ICTSI had offered for the shareholding, US$515 million.
ICTSI is a global port management company that operates and develops container terminals and cargo-handling facilities, including in some of the world’s biggest and most complex economies such as China, Brazil, Indonesia, Argentina, and Australia. ICTSI currently operates 32 port terminals in 19 countries and has a global annual turnover of almost $2.4 billion (R41 billion).
