Ultra bilyonaryo Enrique K. Razon Jr. has sharply criticized Maersk’s legal challenge to International Container Terminal Services Inc.’s (ICTSI) winning bid for South Africa’s Durban container port, calling it a baseless attempt to undermine a fair process.
The dispute stems from a high-stakes bidding process overseen by Transnet, South Africa’s state-owned logistics company, aimed at finding a private partner to revitalize and operate a key terminal.
Razon issued the statement after a South African court had granted an interdict against Transnet’s selection of ICTSI, allowing the legal challenge to proceed and further delaying the privatization of the struggling terminal.
He defended the bidding process, describing it as “well-run, rigorous and transparent.”
“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.”
The ICTSI chairman and president said Maersk is trying to question a non-defined metric that many top global corporations, including tech giant Apple and about 40% of South Africa’s top firms, would struggle to meet.
Razon said the bid evaluation criteria were clear, allowing Transnet to assess offers based on lawful considerations that align with the public interest.
Despite Maersk’s claim of urgency, Razon pointed out that it took nine months for the company to file its case, following ICTSI’s selection as the top bidder.
For 20 years, Maersk has held a dominant market position in South Africa since acquiring SAF Marine, which according to Razon, has allowed them to leverage strong pricing power 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,” Razon said.
Razon also voiced concerns over Transnet’s delays in finalizing the process.
“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,” Razon said.
These internal delays are undermining the value of the terminal, making it more challenging for any private partner to step in,” Razon said, citing plummeting port volumes and reduced profitability as symptoms of the inefficiencies that the partnership is meant to address.
“ 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,” Razon said.
In a regulatory filing, ICTSI said that it had complied with all the tender requirements set by Transnet and is prepared to defend its case through the proper legal channels.
