International Container Terminal Services Inc. chairman Enrique Razon Jr. on Monday slammed Danish shipping and logistics firm Maersk for causing delays in ICTSI’s takeover of a Durban container terminal in South Africa.
Razon, the second richest billionaire in the Philippines after the Sy family, made the statement after a South African court granted an interdict against Transnet’s selection of ICTSI in the privatization of the Durban container terminal. This is expected to delay the privatization of the terminal.
“This was a well-run, rigorous and transparent tender process despite what Maersk has attempted to make people believe,” Razon said in a statement.
“ICTSI is one of the largest terminal operators in the world and is, from an EBITDA standpoint, larger than Maersk’s APM Terminals. We outbid Maersk by $100 million, and they are attempting to use a non-essential technicality to ensure that the government of South Africa does not succeed with part of its economic agenda,” Razon said.
“Maersk is clearly desperate to prevent the entry of an independent common user terminal operator. In short, after failing to produce a strong bid, they are instead trying to delay and stop the process by using the courts,” Razon said.
ICTSI beat APM’s bid for the Durban terminal in July 2023 in a tender process conducted by Transnet, but APM questioned the award before the court in March 2024, alleging that ICTSI failed to meet the terms of the tender including a solvency threshold. The bidding established a minimum solvency ratio as a requirement.
A court in South Africa recently issued an interdict against Transnet’s selection of ICTSI, allowing the case to proceed in court and delaying the privatization plan.
Razon said the qualification rules were very clear, as Transnet could and can evaluate the bidders in whatever way was in line with the law and met the public interest.
He said Maersk was trying to question a non-defined metric that many of the largest public corporations in the world could not meet, including Apple Computer.
“It is also not possible for as many as 40 percent of the top 40 companies on the Johannesburg Stock Exchange, including South Africa’s largest banks and insurers. Moreover, Maersk has attempted to suggest their case required urgent intervention, however, this is the same company that waited nine months before launching a case after ICTSI’s bid was accepted as the best,” Razon said.
He said Maersk dominated the South African market since it acquired SAF Marine over 20 years ago and now holds a dominant position and strong pricing leverage in the market.
Razon said the case would cause further delays in the privatization, and there is a diminishing commitment within Transnet towards the private partnership. “Transnet has not acted expeditiously and has dragged its feet at the highest levels,” he said.
“We believe that there are possibly elements in the organization that do not want the process to succeed, despite it not being a secret that South African businesses are suffering more than ever from inefficiencies in the ports. Volumes are down dramatically, and container port profitability is down significantly,” Razon said. “To be blunt, it will take even more work to resurrect the value of a business that has substantially declined since the tender was launched.”
“It is, therefore, extremely disappointing that further delays are forthcoming. While we have great respect for the Judiciary and the strength of the South African legal system, we believe that serious bias has occurred, and that Transnet’s reputation has been used to derail the process,” he said.
Razon said the delays would curtail the operational recovery and make it more and more difficult for any private partner to succeed.
“This of course all suits Maersk who have just as much interest in the process failing as they do in having their far inferior bid being accepted. Either outcome would be a dramatic step backwards for the Government’s economic agenda but a success for Maersk’s desire for end-to-end control of South Africa’s logistics system,” he said.
