ICTSI’s Enrique Razon takes beef with Maersk public

Enrique Razon, the billionaire head of International Container Terminal Services, Inc (ICTSI), has weighed into an ongoing legal spat in South Africa, accusing Maersk of underhand tactics to try and preserve what he sees as the Danish carrier’s “dominant position” in the country. 

Lawyers working for APM Terminals managed last month to put rival ICTSI’s entry into South Africa’s largest container port on hold, adding another embarrassing setback to the African nation’s bid to privatise and improve their port facilities. 

A South African court decided to temporarily block ICTSI’s 25-year deal with state-run Transnet to take over the running of a container terminal in Durban. 

APM Terminals took the matter to court when it lost the bid, arguing that ICTSI did not meet a stipulated solvency measure.

The court found that Transnet’s decision to award ICTSI the contract was “potentially flawed and … unfair to the other bidders”.

Allowances were made for ICTSI that were not offered to its competitors, the judge declared.

The temporary block will remain in place until the end of the court case, which could stretch into the new year. 

Razon, who Forbes lists as the second-richest man in the Philippines, has made a rare public intervention today, hitting out at Maersk, claiming ICTSI outbid APM Terminals by $100m for the Durban contract. 

Razon claimed Maersk holds a dominant position in South Africa 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,” Razon stated, going on to hit out at state-run Transnet. 

“Transnet has not acted expeditiously and has dragged its feet at the highest levels,” Razon claimed, suggesting there were individuals within the organisation who did not want the process to proceed. 

After 20 years of trying, the South African government via Transnet took its first step towards port privatisation with the ICTSI award.

Transnet selected ICTSI as the preferred bidder for a joint venture to develop and upgrade the flagship Durban terminal 10 months ago so that it can handle 2.8m teu a year, up from the current 2m teu.

The legal delays ICTSI has since encountered, Razon said, will make it 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, adding: “Either outcome would be a dramatic step backward for the government’s economic agenda but a success for Maersk’s desire for end-to-end control of South Africa’s logistics system.”

Maersk has yet to reply to questions sent by Splash today.

Splash has reported repeatedly on the queues of ships that have built up at ports across South Africa, with the country’s terminals repeatedly polling among the lowest productivity-wise in surveys carried out by the World Bank.