Legal showdown over SA port terminal privatisation

Today will mark the start of a massive legal contest in which APM Terminals, owned by Danish shipping company Maersk, is seeking to interdict SA state logistics company Transnet from proceeding with its multibillion-rand privatisation deal with Philippines-based International Container Terminal Services (ICTSI) to revitalise Container Terminal Pier Two in the city of Durban. APM, which was as the runner-up after the tender process, wants the interdict ahead of a further court challenge to set aside the award of the 25-year concession, for which ICTSI bid R12bn in its entirety. Fin24 reports that the matter has been set down before KZN High Court (Durban) Judge Rob Mossop and argument is expected to continue for two days.

APM argues that the process relating to the award of the concession – which seeks to restore Durban as the number one port on the continent – was not above board. ‘It was characterised by a litany of irregularities,’ APM's lawyers say in written heads of argument filed with the court ahead of the hearing. However, Transnet, which is opposing the application, has cautioned that the country's port infrastructure is in crisis and that delays are costing the economy directly R98m per day – and indirectly, R1bn a day – because of the knock-on effect on the supply chain. Fin24 notes that port delays also contributed to a R24.6bn decrease in provisional corporate tax collections in the first half of 2023/24. The revitalisation of the Durban port through the concession was part of a national priority plan and its finalisation was ‘truly urgent’.