ICTSI secures court win, keeps control of African port

MANILA, Philippines — Port tycoon Enrique Razon Jr. has secured a court win to proceed with the 25-year development of a terminal in South Africa following a legal dispute with a Moller-Maersk-owned company.

International Container Terminal Services Inc. (ICTSI) yesterday said a high court in South Africa has thrown out the legal challenge filed by APM Terminals BV, owned by Maersk.

APM Terminals challenged the 25-year concession awarded to ICTSI by state-run Transnet SOC Ltd. for the development of the Durban Container Terminal (DCT) Pier 2.

The court has ruled that Transnet acted within its discretion in awarding the concession. Further, the court has found no reason to doubt the fairness and transparency of the agency in bidding out the contract.

Apart from this, the court has debunked APM Terminals’ claim that ICTSI failed to comply with bidding requirements, particularly on solvency ratio. The court noted that the solvency threshold is just one of the many measures for financial qualification.

The court has judged ICTSI’s financial strength as appropriate to vie for the bidding.

ICTSI is sailing smoothly based on its financial statement, reporting a 15-percent jump in profit to $483.44 million in the first half, from $420.55 million a year ago.

The company also saw its revenue go up by 14 percent to $1.51 billion, attributed to higher fees collected and growth in cargo volume across its portfolio.

In dismissing APM Terminals’ case, the court said the legal challenge only resulted in undue delay to the privatization of DCT Pier 2. ICTSI, for its part, is prepared to work with Transnet in proceeding with their effort to develop the terminal.

“ICTSI welcomes the court’s ruling and reaffirms its commitment to deliver long-term value and operational excellence at DCT 2 in partnership with Transnet. The company will provide further updates to the (Philippine Stock Exchange) regarding the next steps as soon as it receives formal guidance from Transnet on the way forward,” ICTSI said.

DCT Pier 2 is the largest container terminal managed by Transnet, handling 72 percent of cargo throughput at the Port of Durban, making it an enticing project to acquire for ICTSI.

ICTSI is one of the world’s biggest port players in the 50,000 to 3.5 million twenty-foot equivalent unit per year range, booking revenue numbers that can outpace APM Terminals.