Source: Adapted from: Ryan, C$.$ & Naidoo, S$.2023.$ Transnet selects Philippines$-$headquartered port operator for Durban Pier $2$ As part of a broader programme aimed at improving port efficiency. Transnet selects Philippines$-$headquartered port operator for Durban Pier $2$ as part of a broader programme aimed at improving port efficiency.

Transnet has announced Philippines$-$headquartered International Container Terminal Services Inc $($ICTSI$)$ as the preferred bidder for a $25-$year joint venture to develop and manage Durban Container Terminal $($DCT$)$ Pier $2.$ DCT Pier $2$ is South Africa$$s largest container terminal, handling $72\%$ of Durban$$s port throughput and $46\%$ of South Africa$$s port traffic. The move is expected to see multibillion$-$rand direct private sector investment into the port on a scale not seen before.

ICTSI is the Philippines$$ largest multinational company, with operations in $20$ countries. It is not aligned with any shipping company and is$,$ therefore, regarded as a neutral operator with a reputation for excellence. The group is controlled by billionaire, Enrique Razon Jr$,$ according to Forbes. The publication reported in February that ICTSI is set to pump around A$$500$ million $($$$343$ million$)$ to more than double the cargo handling capacity at the Port of Melbourne, Australia$$s busiest port. $$Private sector participation in Pier $2$ is a key catalyst for repositioning the Port of Durban as a container hub port,$$ says Transnet Group CEO Portia Derby; $$We are delighted to have a global player of ICTSI$$s standing on board to drive this process.$$

Transnet says the deal with ICTSI will improve the logistics at South African ports and stimulate trade to and from the country. This is a growth strategy to increase port capacity from $2$ million to $2\mathrm{.}8$ million $20-$foot equivalent units $($TEUs$).$ Transnet says the ultimate goal is to increase the current container capacity through Durban from $3\mathrm{.}3$ million to $11\mathrm{.}4$ million TEUs. A new company will be formed to manage the operations at DCT Pier $2,$ in which Transnet will have majority ownership of $50\%$ plus one share. The agreement is for $25$ years, with an option to extend to a maximum of $30$ years in the event that berth deepening of the North Quay at Pier $2$ is delayed.

Commenting on Transnet$$s announcement, independent Durban$-$based economist, Prof. Bonke Dumisa, said that he $$fully supports this move, if

implemented well.$$This new development of Transnet, in creating a joint venture with a globally$-$recognised entity in order to turn around the Durban Port, is a very strategic and plausible move.$$ Undertake a gap analysis from the perspective of Transnet and ICTSI entering into the Durban port deal