by Lloyd's List
A SOUTH African judge has dismissed APM Terminals’ challenge for the tender of Durban Container Terminal Pier 2.
International Container Terminal Services Inc was selected by state-owned transport company Transnet in July 2023 as the preferred bidder for a 25-year concession, that would see the flagship Durban terminal’s annual box capacity increased from its current approximate 2m teu to around 2.8m teu. Maersk subsidiary APM Terminals was runner-up in the tender process.
But APMT challenged the decision in court, focusing specifically on how ICTSI’s solvency ratio (i.e. whether it can afford the 25-year investment) was calculated.
Judge Mahendra Chetty said ICTSI used a different formula to calculate its solvency, though had it used the total equity loss/total assets formula that all other applicants used (including APMT), it would have calculated a ratio below the 0.4 required.
Still, both AMPT and ICTSI progressed to the next stage of the tender process.
Judge Chetty said it was “noteworthy that none of the other unsuccessful bids who progressed” contested ICTSI’s selection, nor did the Manila-based terminal operator accrue an advantage by virtue of the score recorded in the solvency ranking.
“This was essentially a vetting stage to ascertain the responsiveness of the bidders,” he said.
“To have disqualified ICTSI for its failure to achieve a solvency ratio (based on a specified formula), would have been to disqualify a meritorious tenderer, and open the way for a significantly lower bid to have prevailed. This would be contrary to the purpose of the tender and the financial objectives of Transnet.”
Chetty also criticised AMPT’s decision to delay its challenge for more than six months after ICTSI was first awarded the concession, and dismissed the application to halt the tender.
ICTSI regional head Hans-Ole Madsen said the ruling “reaffirms our confidence in the legality of the bidding process and validates our commitment to operating with integrity and in full compliance with the law”.
“We have always believed in the strength of our position, and we are pleased that the court has agreed.
“We now stand ready and look forward to working with Transnet at DCT, and the importers and exporters who rely on South Africa’s busiest container terminal to make a range of operational improvements for the betterment of all stakeholders and the South African economy.”
