ICTSI gets 20-year contract for Madagascar port

International Container Terminal Services Inc. (ICTSI) has been awarded a 20-year concession for the operation and management of the port of Toamasina, Madagascar, the International Finance Corp. (IFC) said.

ICTSI won the IFC-supervised bidding for the Madagascar port last month, besting a powerhouse of other world-class port operators such as AP Moller Finance, Hutchison Port Holdings, and the consortium of Malta Freeport, CMA, and CGM-Bollor.

"This transaction is the result of the reform process that the government of Madagascar initiated three years ago with the support of the World Bank, which has been a key in developing a sustainable transport sector strategy in the country," the IFC said.

The IFC is the private sector investment arm of the World Bank.

The IFC said the winning bid was based on a single transparent financial criterion consisting of the highest royalty fee per 20-foot equivalent (TEU) container handled.

Currently, the port of Toamasina accounts for over 90 percent of all container traffic in Madagascar. The concession documents specify the obligations and risks that will be shared between the private operator and the newly-established port authority of Toamasina, the Societe de gestion du Port Autonome de Toamasina.

During the life of the concession, it is estimated that over $300 million will be mobilized from the operations of the container terminal in the form of concession fees, royalties, and investments.

IFC director for advisory services Bernard Sheahan said that the fact that a Philippine company was selected in the bidding process makes this transaction another landmark in south-south cooperation.

"IFC’s participation is part of our commitment to strengthen the private sector in Madagascar," the IFC official added.

This transaction represents IFC’s eighth successful advisory transaction in Sub-Saharan Africa in the past 10 years, including Kenya Airways, Uganda Telecommunications, Gabon Water and Electricity, Cameroon Electricity, South Africa National Parks, Air Tanzania, and the Moatize Coal Mine in Mozambique.

ICTSI reported a consolidated net income of P1.06 billion last year, doubled from its net earnings of P528 million the prior year.

In a report, ICTSI attributed its outstanding income growth to increasing operational and financial contributions from its foreign operations in Brazil and Poland, aside from its Philippine operations.

The Manila International Container Terminal (MICT) at the North Harbor, is its flagship port project, recorded a nine-percent container volume growth this year.

ICTSI president Enrique K. Razon Jr. said that the company is experiencing increased contributions from its foreign operations, thus validating its strategy of expanding overseas.

"We shall continue to invest in our existing terminals to improve efficiencies while growing our portfolio of terminals overseas," Razon said.