South Africa’s state-owned logistics group Transnet has formalized a long-term partnership with Philippines-based International Container Terminal Services Inc. (ICTSI) to modernize and operate Durban Container Terminal Pier 2, a move aimed at restoring performance at the country’s most critical container hub. The 25-year agreement establishes a joint venture in which Transnet retains a 51% stake while ICTSI holds 49% and assumes responsibility for day-to-day terminal operations. The concession, which begins in January 2026, includes a planned R11 billion investment programmes to upgrade equipment, systems, and capacity at Pier 2, which currently handles more than 70% of Durban’s container volumes and close to half of South Africa’s total container throughput. The deal is designed to reduce congestion, improve vessel and truck turnaround times, and strengthen the efficiency of South Africa’s maritime transport network, making Durban container terminal modernization a central pillar of Transnet’s wider recovery strategy.
The agreement follows a prolonged effort to address chronic operational challenges at South Africa’s ports, where aging equipment, delays, and low productivity have constrained trade and export growth. Transnet initiated a competitive tender process in 2023 to attract private sector expertise into port operations, with ICTSI emerging as the preferred bidder in July of that year ahead of competitors, including APM Terminals. ICTSI, headquartered in Manila and led by Enrique K. Razon Jr., operates port facilities across 19 countries in Asia, Africa and the Americas. The transaction was delayed by a legal challenge from APM Terminals concerning the evaluation of ICTSI’s financial capacity, but the challenge was dismissed by a South African court, clearing the way for finalization. With the agreement now concluded, Durban container terminal modernization is positioned as the largest private sector participation to date in South Africa’s port system.
Under the terms of the concession, a new operating company, Newco, will be established to manage and upgrade Pier 2. ICTSI’s R11 billion investment will fund new ship-to-shore cranes, cargo-handling equipment, and digital operating systems. These upgrades are expected to increase annual capacity from 2 million twenty-foot equivalent units to 2.8 million TEUs, raise crane productivity from 18 to 28 moves per hour, and expand vessel working hours from 60 to 120. The objective is to reduce vessel waiting times, ease landside congestion, and improve reliability for shipping lines, exporters, and logistics providers. Transnet has positioned Durban container terminal modernization as a test case for attracting private capital while retaining public ownership of strategic transport assets.
Transnet Group Chief Executive Michelle Phillips described the agreement as a milestone, saying, “Today, we mark the beginning of a 25-year partnership between ICTSI and Transnet to modernize and operate Pier 2 at the Durban Container Terminal.” ICTSI Senior Vice President Hans-Ole Madsen added, “This partnership marks a shared commitment to revitalizing South Africa’s maritime infrastructure and unlocking new opportunities for growth for South Africa and the entire region.” Transnet Port Terminals Chief Executive Jabu Mdaki also characterized the signing as a significant moment for the national ports system. Once operational, the partnership is expected to improve trade flows, lower logistics costs, and support employment across the transport and logistics value chain.
