The head of Philippines-based International Container Terminal Services (ICTSI) has accused Danish shipping company Maersk of conspiring to prevent the commencement of a concession contract between ICTSI and South Africa's state-owned port operator Transnet.
ICTSI Chairman and CEO Enrique K. Razon Jr spoke out against what he claims is Maersk's underhanded tactics in blocking a deal wherein ICTSI would operate the Port of Durban for a period of 25 years.
Maersk, via subsidiary APM Terminals, had brought the matter to a South African court and challenged Transnet's decision to award the contract to ICTSI, claiming that ICTSI failed to satisfy a key requirement regarding solvency evaluation. The court subsequently decided that Transnet's awarding of the contract was "potentially flawed" and therefore "unfair" to the other bidders.
"This was a well-run, rigorous, and transparent tender process despite what Maersk has attempted to make people believe," Razon said in a statement dated November 11.
He added that ICTSI outbid Maersk by US$100 million but the latter is "attempting to use a non-essential technicality to ensure that the Government of South Africa does not succeed with part of its economic agenda."
"The qualification rules were very clear," Razon continued. "Transnet could and can evaluate the bidders in whatever way was in line with the law and met the public interest. Maersk is now 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 per cent 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 also expressed concern that as the delays continue, "there is a diminishing commitment within Transnet towards this private partnership" and that Transnet "has not acted expeditiously and has dragged its feet at the highest levels."
"We believe that there are possibly elements in the organisation 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 remarked that it will take even more work to "resurrect the value of a business that has substantially declined since the tender was launched."
"While we have great respect for the Judiciary and the strength of the South African legal system," Razon continued, "we believe that serious bias has occurred, and that Transnet’s reputation has been used to derail the process."