South Africa’s state-owned port and logistics operator, Transnet SOC Ltd., has signed a major concession agreement with a company led by Filipino billionaire Enrique Razon to expand the main terminal at Durban, the continent’s busiest container hub.

The deal marks the first port-privatisation agreement in South Africa and signals a push to improve efficiency at the country’s struggling ports

The agreement follows a similar move two years ago, when Transnet awarded International Container Terminal Services Inc. the right to acquire nearly half of Container Terminal Pier 2 and manage it for 25 years.

Under the new arrangement, Razon’s firm will invest roughly 11 billion rand ($647 million) to upgrade infrastructure and enhance operations at the terminal.

“This ground-breaking partnership is a step forward in Transet’s ambition to be among the world’s best ports,” Transnet Chief Executive Officer Michelle Phillips said.

Durban’s Pier 2 is the heart of South Africa’s container traffic, handling about 70% of the port’s total throughput and more than 40% of the nation’s container volumes, according to Phillips.

The World Bank ranks South Africa’s ports among the least efficient globally, and inefficiencies have long been a drag on trade, increasing costs for importers and exporters alike.

Source: Africabusinessinsider