South Africa: Durban High Court affirms important tender principle

In a judgement handed down on 10 October 2025 the Durban High Court upheld Transnet’s award of a 25-year concession to ICTSI, a Philippines based company, for the operation of the Durban Container Terminal.

ICTSI is the world’s largest independent container terminal operator active on six continents. It offered to pay Transnet ZAR 2 billion more than the next highest bidder, APM Terminals (ICTSI bid ZAR 11 billion in total) for its shares in the concession company.

In doing so the Court upheld a number of important procurement principles first set by the Constitutional Court in the All Pay decision regarding how, what the Court described as ‘minor slips’ in the procurement process, should be dealt both by the procurer and by the Court.

Amongst other things, the Court was called upon to consider whether Transnet was entitled to consider ICTSI’s solvency with regard to its factual solvency position or was bound by the method and procedure in the tender document in deciding in this. APM challenged ICTSI’s approach to the solvency calculation in the bidding process.

The Court relied on the proposition that not every departure from the prescribed procedure must be set aside, and where there is a departure from a prescribed procedure in a tender process, the reasons for the departure must be reasonable and justifiable and the process to change must be procedurally fair.

This case is an important confirmation that, post the All Pay decision, the relevant ‘test’ has shifted from a formalistic consideration to a consideration of the ‘materiality’ of any procurement errors. 

As such, in determining whether a procurement process should be set aside because a breach or a requirement, even of a ‘mandatory requirement’, it is necessary to place the ‘mandatory requirement’ in context. Consideration must be given to the materiality of the breach to the overall objectives of the procurement process and of the procurer. 

The Court held that: ‘To have disqualified ICTSI for its failure to achieve a solvency ratio (based on a specified formula) would have been to disqualify a meritorious tenderer, and open the way for a significantly lower bid. This would be contrary to the purpose of the tender and the financial objectives of Transnet. It would also have the effect of retarding rather than promoting the values of ‘competitiveness’ which is referred to in section 217 of the Constitution.’ 

Bowmans assisted ICTSI to defend the award by Transnet. Head of Public Services Regulatory, Claire Tucker, says ‘Bowmans is very pleased to have had the opportunity to run this important case for ICTSI. The decision opens the way for ICTSI’s 25-year concession in the Durban Container Terminal at Pier 2, which is important to the revitalisation of this international gateway.’