This was a well-run, rigorous, and transparent tender process despite what Maersk has
attempted to make people believe.
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 100M USD 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.
The qualification rules were very clear: 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% 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 9
months before launching a case after ICTSI’s bid was accepted as the best.
Maersk has dominated the South African market since it acquired SAF Marine over 20
years ago and today Maersk holds a dominant position and strong pricing leverage in
the market. 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.
We are more and more concerned that as these delays continue, there is a diminishing
commitment within Transnet towards this private partnership. Transnet has not acted
expeditiously and has dragged its feet at the highest levels.
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.
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.
These delays will 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.
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