High Court Ruling Clears Path for Transnet’s Durban Terminal Expansion

Transnet has received a major boost in its efforts to revitalise South Africa’s port infrastructure following the KwaZulu-Natal High Court’s dismissal of an application challenging the selection of an equity partner for the Durban Container Terminal (DCT) Pier 2. The judgment effectively removes the final legal obstacle to the state-owned company’s landmark public-private partnership with International Container Terminal Services, Inc. (ICTSI), paving the way for one of the most significant port modernisation projects in South Africa’s history.

A Legal Victory for Governance and Transparency

In welcoming the ruling, Transnet Group Chief Executive Michelle Phillips said the decision confirms the “integrity and transparency” of Transnet’s procurement process and governance frameworks.

“This ruling confirms the integrity and transparency of Transnet’s procurement processes and governance structures. It removes a major hurdle to the implementation of the transaction. We can now focus all our energy on executing our plan to modernise and expand DCT Pier 2,” Phillips said.

The ruling comes after months of legal contention over the process used to select ICTSI as Transnet’s preferred partner. The court found no grounds to set aside the transaction, affirming that Transnet followed a rigorous, fair, and legally compliant procurement process.

The Significance of the Durban Container Terminal Pier 2 Project

The DCT Pier 2 is the largest container terminal in South Africa, handling 72% of the Port of Durban’s throughput and 46% of the nation’s total container volumes. Given its scale and strategic importance, the terminal is considered the backbone of South Africa’s container trade and a vital link in the global supply chain.

Located along one of the world’s busiest maritime routes, the Port of Durban connects sub-Saharan Africa to key markets in Asia, Europe, and the Americas. Enhancing its capacity and efficiency is therefore crucial to maintaining South Africa’s competitiveness as a regional logistics hub.

Background of the ICTSI Partnership

In July 2023, Transnet selected ICTSI, a Philippines-based global terminal operator with a presence in over 20 countries, as the preferred bidder for a 25-year joint venture with Transnet Port Terminals (TPT). The partnership is designed to develop, upgrade, and manage Pier 2 under a co-investment model that combines public oversight with private-sector efficiency and technical expertise.

A comprehensive due diligence process was conducted to assess ICTSI’s financial strength, operational capability, and global track record. The resulting report confirmed ICTSI’s financial viability and its capacity to support large-scale infrastructure investments.

Driving Economic Growth and Port Efficiency

The partnership is expected to significantly improve DCT Pier 2’s productivity, throughput, and turnaround times — areas that have long been affected by aging equipment, port congestion, and operational bottlenecks. According to Transnet, the involvement of a world-class private operator will not only modernise the terminal’s infrastructure but also introduce advanced technologies, including automated cargo handling systems, predictive maintenance tools, and digital logistics management platforms.

“The ruling paves the way for us to move expeditiously to finalise the implementation of this transaction without undue delay. We remain committed to transforming our ports into world-class hubs that unlock new trade opportunities through the deployment of state-of-the-art equipment,” said Phillips.

She noted that while the legal challenge caused “unwanted delays,” the organisation remains confident that the court’s affirmation will prevent similar disruptions in future private sector participation (PSP) ventures.

Boosting Investment and Economic Competitiveness

The ICTSI partnership is part of Transnet’s broader reform programme to attract private investment into its terminals, improve operational performance, and stabilise South Africa’s critical logistics infrastructure.

By “crowding in” private capital and expertise, Transnet aims to enhance the efficiency of cargo handling, reduce costs for exporters and importers, and strengthen the country’s position in global maritime trade. The modernisation of Pier 2 is also expected to create thousands of direct and indirect jobs, support the local supply chain, and stimulate economic activity in the Durban region.

“The transaction represents a major step in Transnet’s strategy to bring in global expertise and capital to improve efficiencies across our terminals,” the company said in a statement. “The tender process was fair, transparent, and aligned with South Africa’s public procurement regulations.”

A Strategic Turning Point for South African Ports

The Durban Container Terminal Pier 2 expansion marks a pivotal moment in Transnet’s turnaround strategy and South Africa’s broader infrastructure recovery efforts. The success of this joint venture could serve as a blueprint for future PSP initiatives across the logistics and transport sectors, where ageing infrastructure and inefficiencies have hampered economic growth.

With the court ruling now behind it, Transnet is set to fast-track the implementation of the project — unlocking billions of rand in investment, improving port performance, and positioning Durban as a world-class maritime gateway capable of handling the growing demands of international trade.