Philippines’ International Container Terminal Services Inc. has formed a partnership with South Africa’s state-owned logistics firm to run the continent’s biggest port, which is struggling with costly inefficiencies.

South Africa’s national ports company Transnet is seeking to boost private participation in its ports, the poor performance of which is a drag on the economy.

The Philippines company, ICTSI, the largest independent terminal operator, has been selected as an equity partner to run and expand Durban Container Terminal Pier 2 for the 25-year joint venture, Transnet said in a statement.

ICTSI will cooperate with Transnet's subsidiary Transnet Port Terminals to develop and upgrade the terminal, which is Transnet’s biggest container terminal.

Pier 2 handles 72% of the Port of Durban’s throughput - amount of cargo or number of vessels - and 46% of South Africa’s total port traffic.

“Private sector participation in Pier 2 is a key catalyst for repositioning the Port of Durban as a container hub port,” Transnet Group CEO Portia Derby said.

The partnership with ICTSI will help reposition the terminal for best practice performance, ensuring growth in volume throughput, and will support the terminal in providing operational and commercial support to access global shipping line call routes, Transnet said.

Transnet will own a 50% plus one share in a new company that will manage the terminal for 25 years and will seek to boost its annual capacity to 11.4 million twenty-foot equivalent units from 3.3 million, it said.

Transnet said the agreement with ICTSI - one of six bidders for the contract - will play a significant part in stimulating exports and imports.

ICTSI is headquartered in Manila, Philippines and is a publicly-listed company, traded on the Philippine Stock Exchange and the Over-the-Counter Markets Group in the United States.

ICTSI operates 34 terminal operations in 20 countries across six continents, including four in Africa.

In a 2021 World Bank index of container port performance, Durban was ranked 364th out of 370.

Unions have criticised Transnet's plan, saying jobs and collective bargaining would be under threat from public-private deals at Transnet.

The state-owned ports and freight operator has previously ruled out a complete privatisation of its assets.

(Editing by Seban Scaria seban.scaria@lseg.com)