SOUTH AFRICA – Transnet SOC Ltd (Transnet) has committed to fast-tracking the review process for the Durban Container Terminal Pier 2 contract dispute.

The state-owned company plans to approach the courts to secure a hearing date to ensure Part B of the review proceeds swiftly.

Following a court judgment issued on October 9, 2024, Transnet faces an interim interdict in relation to the contract awarded to International Container Terminal Services Incorporated (ICTSI).

The contract, part of a broader strategy to revitalize Pier 2, remains in place for now. However, the interdict temporarily halts any further negotiations or implementation of the award pending the outcome of the review process.

The legal battle arose after APM Terminals (APMT), the unsuccessful bidder, filed a court application. Part A of APMT’s application sought an urgent order to prevent Transnet from proceeding with ICTSI on the Pier 2 contract, which has been granted through the interim interdict.

Part B, which has yet to be heard in court, challenges Transnet’s decision to award the contract to ICTSI, asking for it to be set aside entirely.

Although the interdict has delayed some actions, Transnet emphasized its respect for the legal process. “We will fully comply with the court’s interim ruling, but our commitment to resolving this matter efficiently remains a priority,” a Transnet spokesperson said.

Transnet sees the Pier 2 project as part of its broader strategy to invite private sector participation. This initiative aims to improve the overall efficiency of South Africa’s port operations.

The Pier 2 contract is intended to be a flagship example of how public-private partnerships (PPPs) can drive meaningful reform.

“The involvement of private partners, like ICTSI, is part of our effort to enhance competitiveness and increase throughput at our ports,” the spokesperson added.

The organization has reiterated that its move toward PPPs does not indicate a shift toward privatization but rather a collaboration designed to optimize resources.

Transnet has begun investing in new equipment to stabilize port operations, including a fleet renewal program aimed at addressing years of underinvestment in port infrastructure.

These upgrades will include replacing critical machinery like ship-to-shore cranes and rubber-tired gantries to ensure smoother port operations.

“We have made significant progress in our equipment renewal plans, which will improve operational efficiency at the Durban Container Terminal and other key ports,” the company stated.

CEO Phillips calls for urgent reforms in fruit export logistics

Approximately a month ago, Transnet CEO Michelle Phillips outlined plans to improve South Africa’s fruit export logistics. Speaking at the International Fresh Produce Association’s Southern Africa Conference 2024, Phillips addressed the ongoing challenges faced by the industry.

“Our ports are facing significant operational challenges, and we need to act swiftly to fix these problems,” Phillips remarked.

She acknowledged that delays in fruit export logistics had severely impacted the industry, with transit times nearly doubling from 25 to 45 days in some cases. An avocado exporter noted, “This extended transit time is now the norm, but it’s unsustainable.”

Phillips emphasized that Transnet was working to involve the private sector to improve operations. “We want the private sector involved in our business, there’s no doubt about that,” she stated, clarifying that this approach does not equate to privatization.

Transnet committed to purchasing new cranes for the Durban and Port Elizabeth terminals, along with additional reefer train sets for cold-chain logistics. Phillips assured stakeholders, “We’re making progress, and we expect to see tangible improvements in the near future.”

With these reforms underway, South Africa’s fruit exporters remain hopeful that the logistical challenges they face will be alleviated soon.

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