A.P. Moller-Maersk A/S in a legal battle with Transnet over procurement process

A.P. Moller-Maersk A/S is embroiled in a legal battle with South Africa’s state logistics entity, Transnet, over the procurement process to secure a partner for the development of sub-Saharan Africa’s largest container port.

The contract was awarded to International Container Terminal Services Inc. (ICTSI), granting them nearly half ownership and operational rights for 25 years at the main container terminal in Durban, a bustling port city in the southeast.

Among the unsuccessful bidders was Maersk’s subsidiary, APM Terminals, which has taken legal action by filing an interdict application in the Durban High Court to challenge Transnet’s decision.

In response to inquiries on Monday, Maersk stated its intention to ensure the transparency, fairness, and compliance of the selection process. This legal manoeuvre coincides with South Africa’s broader agenda to enhance private sector involvement in state-owned enterprises, aiming to revitalize underperforming assets.

Transnet’s objective in soliciting private partnerships is to revamp port operations, addressing their poor global rankings, and bolstering rail services, crucial for the country’s mining sector.

The agreement with ICTSI marks a significant step towards privatizing port operations, revealing a departure from traditional state-led management.

Transnet defended its decision, asserting that due diligence was diligently followed in the selection of a partner for Durban Container Terminal Pier 2.

On March 1, Transnet’s board announced the completion of financial due diligence and approved the finalization of the contract with ICTSI, owned by Filipino tycoon Enrique Razon.

In response to Maersk’s legal challenge, ICTSI affirmed its position but refrained from elaborating further on the ongoing legal proceedings.