Trade union demands to save jobs could delay the transfer of operations of the Durban port Container Terminal 2 to the privately owned Philippine-based International Container Terminal Services Incorporated (ICTSI).
The United National Transport Union and South African Transport and Allied Workers Union issued a demand before December that ICTSI guarantee workers that there will be no retrenchments for the duration of the 25-year contract. The demands were submitted to both ICTSI and Transnet; however, the companies have yet to respond to the unions.
Transnet announced the public/private partnership in July 2023 but has not revealed details of the contract that was awarded to ICTSI, which operates terminals across six continents. The company was one of six bidders for the contract.
Department of Public Enterprises spokesperson Elias Mnyandu told News24 this week that the “ultimate outcome” of the deal was to enhance productivity and efficiency of the port terminals and that although Minister Pravin Gordhan had met with unions, the department would not get involved in procurement processes.
"There must be no job losses and the conditions of services must remain the same," Mnyandu said.
ICTSI will pay an undisclosed amount for almost half of Durban Container Terminal Pier 2 to run and develop the facility, which handles three-quarters of the freight volumes of the port and 46% of the country’s total port traffic.
According to Transnet, the plan is to grow the terminal’s handling efficiency from the current two million TEUs to 2.8m.
Transnet said it had held numerous consultations with the unions, which were mostly focused on the treatment of employees, and said workers would not lose their jobs as the joint venture took over operations.
The terminal’s assets are valued at R2.5 billion and at the end of the contract, Transnet will buy the shares back from ICTSI. However, agreements with labour must be finalised and due diligence carried out on ICTSI before the deal can be finalised.
Durban ranked 341st out of 348 in a 2022 World Bank index of container port performance.
