South Africa's state-controlled Transnet and Manila's International Container Terminal Services Inc (ICTSI) have agreed a 25-year partnership to modernize Durban's Pier 2, reports Geneva's Ecofin Agency.

Under the deal signed December 10, Transnet will hold a majority stake in a new entity, Newco, while ICTSI will operate the terminal. The agreement is part of South Africa's wider port reform programme to ease congestion and improve efficiency.

The partnership follows a legal challenge by Maersk's APM Terminals, which sought to overturn ICTSI's concession awarded in July 2023. The KwaZulu-Natal High Court dismissed the case in October, clearing the way for the project.

Transnet said private investment will fund new equipment and advanced technology to expand capacity from two million to 2.8 million TEU. Crane productivity is expected to rise from 18 to 28 moves per hour, while vessel working hours should double from 60 to 120.

The Durban Container Terminal, which handles 72 per cent of Durban Port's throughput and 46 per cent of South Africa's container volumes, has faced chronic congestion and declining productivity. The World Bank's Container Port Performance Index ranked South African ports among the lowest of 403 assessed.

The Durban project is part of a broader restructuring to attract private capital across major ports including Cape Town, Richards Bay and Ngqura.