Maersk Loses South Africa Court Bid Blocking Key Port Deal
(Bloomberg) — A South African court dismissed a lawsuit filed by AP Moller-Maersk A/S challenging a port expansion deal awarded to a firm headed by Filipino billionaire Enrique Razon, paving the way for expanding the continent’s top container hub.
The Supreme Court on Friday rejected the move after finding that Razon had been transparent in calculating International Container Terminal Services Inc.’s solvency ratio; It’s a metric that South African state-owned port operator Transnet SOC Ltd. uses to decide whether bidders can afford to operate and expand the main terminal in the southeastern city of Durban.
“This makes clear that the tender awarded to ICTSI to operate Durban Container Terminal Pier 2 was fair and transparent,” the company said in a statement.
In 2023, Transnet granted ICTSI the right to purchase almost half of the facility and operate it for 25 years, with Maersk’s APM Terminals unit coming second in the process. Razon’s firm will spend about 11 billion rand ($638 million) on its plans.
Maersk’s legal objection in April 2024 alleged that ICTSI had failed to meet the solvency measures specified in the tender process. That has delayed the biggest push to bring private expertise to revive state-owned ports, which are among the least efficient globally, according to the World Bank.
“We recognize the importance of operational improvements and infrastructure development in Durban without further delay and will therefore take into account the wider interests of developing South African port infrastructure when determining possible next steps,” APM said in a statement, adding that it was considering the court decision.
Durban Container Terminal’s Pier 2 handles 72% of the port’s total volume and 46% of South Africa’s container volume.
“We can now focus all our energies on implementing our plan to modernize and expand DCT Pier 2,” Transnet Chief Executive Michelle Phillips said in a statement. The court decision “clears the way for us to act expeditiously to finalize the implementation of this transaction without undue delay.”
Transnet, Maersk, as well as COSCO Shipping Ports Ltd., DP World Ltd., China Harbor Engineering Co. and Guangzhou Port Co. It also shortlisted companies such as.
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(Updates with Maersk comment in sixth paragraph.)
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