Maersk Loses Legal Challenge Over Durban Port Concession

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AP Moller-Maersk A/S has suffered a legal setback in South Africa, as the KwaZulu-Natal High Court dismissed its challenge against the award of the Durban Container Terminal (DCT) Pier 2 concession.

The ruling clears the way for Philippines-based International Container Terminal Services Inc. (ICTSI) to proceed with a 25-year, R11.1 billion (approximately $640 million) agreement to operate and modernize the terminal.

The court criticized Maersk’s subsidiary, APM Terminals, for delaying its legal action until March 2024, despite the concession being awarded in July 2023.

This delay was considered unreasonable and contributed to the dismissal of the case.

Central to the dispute was the calculation of solvency during the tender process. APM Terminals argued that ICTSI’s use of market capitalization, rather than balance sheet equity, violated tender requirements.

The court, however, concluded that ICTSI’s financial capacity was adequately demonstrated and that the method used did not confer any unfair advantage.

DCT Pier 2 is South Africa’s largest container terminal, handling 72% of the Port of Durban’s throughput and 46% of the nation’s container volumes.

The modernization project is expected to increase capacity from 2 million TEUs (twenty-foot equivalent units) annually to 2.8 million TEUs, while addressing longstanding congestion challenges.

ICTSI welcomed the ruling, emphasizing that it affirms a fair and transparent tender process. The company will now move forward with planned upgrades in partnership with Transnet Port Terminals.

The outcome represents a significant step in South Africa’s ongoing efforts to modernize its port infrastructure and enhance logistics efficiency, a critical factor in supporting the country’s economic growth and competitiveness.

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