The US$164 million upgrade of the Port of Maputo is officially under way, setting the stage for an expansion that will more than double the port’s container capacity within two years.
While this development is a boon for regional trade, it poses a serious threat to South Africa’s ports, which continue to struggle with delays, congestion and chronic equipment failures.
Once a dominant player in Southern African logistics, South Africa now risks ceding its position to neighbouring countries that are modernising their port infrastructure through private investment.
Mozambique’s Maputo and Beira ports and Namibia’s Walvis Bay – once secondary alternatives – are now attracting container ships that would have traditionally docked in Durban or Cape Town. With the Maputo upgrade, the competition that South Africa faces will only increase.
The Mozambique capital city port is benefiting from capital inflows by private operator DP World, an investment company that manages strategic trade investments for the government of Dubai and manages the Maputo container terminal.
Competing directly with South Africa, the Maputo port website promotes itself “as a gateway to southern Africa” and advertises land transport from the port into South Africa and neighbouring countries.
Mozambique has recognised and welcomed the importance of private-public partnerships (PPPs) that inject much-needed capital into upgrading infrastructure, while allowing governments to retain ownership of critical infrastructure and the land.
In late January, the Democratic Republic of Congo’s port, based 150km inland on a river mouth, announced that one of its terminals would be upgraded to the tune of €100 million.
These deals are essential if infrastructure is to meet international standards and allow nations to compete globally.
However, in South Africa, Transnet, the state-owned logistics company, is weighed down by more than R137.6 billion in debt and has reported two consecutive financial losses amounting to billions of rand, showing that it needs private equity partners to revitalise its operations. Without private capital to assist Transnet, South Africa’s ports will likely continue to struggle to innovate, driving even more traffic to better-managed competitors.
As President Cyril Ramaphosa prepares to deliver his State of the Nation address in early February, it is vital that he addresses the need for PPPs to upgrade key infrastructure such as ports and rail and boost the economy.
The clearest example of South Africa’s failure to embrace reform is the stalled upgrade of Durban’s Terminal Pier 2.
In 2023, global port operator International Container Terminal Services Incorporated (ICTSI) won a competitive and transparent bid to run the country’s largest container facility and committed to invest R11 billion into improving port performance.
Our plan would include implementing state-of-the-art tracking software to help importers and exporters predict container arrivals with accuracy – a crucial improvement for businesses that currently struggle with unpredictable delays and not knowing where containers are. Yet, despite ICTSI’s proven track record in 19 countries, the project remains in limbo due to a challenge from Maersk, the losing bidder, whose offer was 20% lower.
This spurious dispute has indefinitely delayed a project critical to South Africa’s economic competitiveness.
Maersk’s lawfare is holding the country to ransom with a challenge on a minor technicality. Maersk is doing this while donating equipment to the Durban and Cape ports, effectively trying to control them through stealth.
In court, Maersk is arguing that ICTSI used the wrong measure for financial solvency, a ratio to show its financial ability to manage and invest in the port. But the tender did not specify the way to calculate the ratio and there are many accepted ways to measure solvency.
ICTSI’s solvency measure is fully recognised in South Africa’s Companies Act. Moreover, we are a publicly listed company whose publicly available financial statements clearly show we have the ability to generate capital and invest in Transnet having made more than R41 billion in revenue in the first nine months of our 2024/25 financial year.
This lawfare on a technicality merely delays a critical public-private partnership at a time South Africa cannot afford years-long delays in upgrading vital trade routes while neighbouring competitor ports charge ahead. By rejecting the privatisation of Cape Town’s port and allowing Durban’s upgrade to be paralysed by litigation, the government is effectively conceding economic ground to Mozambique and Namibia.
Shipping companies are increasingly docking at Maputo, Beira, and Walvis Bay, even when South Africa is their ultimate destination. If this trend continues, South Africa could permanently lose its status as a regional shipping hub. Once trade routes shift, reversing them will be exceedingly difficult.
ICTSI has the experience to run Durban Container Terminal 2 port to a world-class standard.
By way of recent example, we turned a terminal in Melbourne, Australia into one of the leading terminals in the country despite initial fears it could not take on incumbent operators. Our terminal in Mexico boosted that country’s export and textile economy allowing firms to ship higher quantities of manufactured goods abroad.
The government has rightly recognised the value of PPPs as a necessity including at the country’s largest container port. What is needed now is for all players involved, including Maersk, to put the country’s economic future first. If there are further unnecessary delays, not only will SA lose billions in trade, it will also watch its neighbours reap the benefits of modern, well-run ports while its own economy suffers.
