A project aimed at improving efficiencies in a section of the Durban port is having the opposite effect due to a dispute over a contract | Leon Lestrade/ Independent Newspapers
Durban — The Association of South African Chambers (ASAC) has called on Transport Minister Barbara Creecy to cancel the disputed Port of Durban Pier 2 tender which it said has negatively impacted the logistics industry.
The chamber, which is the umbrella body for most of the country’s business chambers, has written to Creecy urging her to intervene in the legal wrangle between foreign companies who bid for the tender.
Last year Transnet Port Terminal (TPT) awarded a 25-year contract to the firm International Container Terminal Services, a giant company from the Philippines, under a Private Sector Partnership (PSP) arrangement.
However, a rival bidder, AP Moller-Maersk from Denmark, disputed the award, describing it as invalid and unlawful.
The Danish company lodged a protracted legal fight urging the court to set it aside, but this is being defended by TPT which recently argued that the process was fair. TPT warned that in a worst-case scenario that if the court set the tender aside, it would delay the process for a further two years.
In a letter seen by the Daily News, the ASAC has called on the minister to consider cancelling the tender and starting the process afresh to avoid uncertainty in the logistics industry.
“While we acknowledge the ongoing legal dispute and the court proceedings set to recommence in March 2025 and without any apparent end in sight, this delay provides an ideal opportunity to reflect on and reassess the current framework,” read the letter.
“Given the ongoing disruptions and the impact on the industry, we suggest that the current PSP model be reviewed to determine whether it is truly the best approach for the Port of Durban Pier 2 process, the broader logistics system and the interests of the country.”
The ASAC challenged Creecy to look into whether the process was in line with South Africa’s economic priorities and logistics needs, particularly in terms of improving port efficiency, competition, and cost reduction? It called for the PSP framework to be re-examined to ensure it was fit-for-purpose, providing the necessary flexibility and accountability mechanisms to achieve long-term goals.
“As an alternative, we propose that cancelling the tender could allow for a comprehensive review and an opportunity to restart the process with an agreement better aligned with the country’s long-term logistics strategy and related needs. This would also mitigate the risks of further uncertainty and disruption caused by the ongoing legal challenges, said ASAC.
Speaking to the Daily News on Wednesday, the ASAC chairperson Melanie Veness said the delay in the Port of Durban Pier 2 project was having a profound impact on the logistics industry, particularly regarding investor confidence, operational efficiency, and overall productivity.
She said the national logistics crisis had already created substantial inefficiencies that are affecting supply chains across the country, adding that the pause in this critical initiative only further exacerbates these challenges, hindering efforts to streamline operations and reduce logistics costs.
After a cargo ship backlog last year that forced hundreds to park out at sea for months waiting to dock, TPT announced that it was looking for an equity partner to manage the port terminal. Since there was no company in SA with the capacity to do such work, Transnet awarded the tender to International Container Terminal Services.
Transport spokesperson Colleen Msibi had not responded with a comment at the time of the publication but had promised to do so.
Msibi said he was locked in a meeting of ministers and their Mozambique counterparts trying to resolve the Lebombo border crisis which has caused another logistics crisis.
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