The ports group had removed all its Filipino employees from the Mediterranean hub before announcing its withdrawal to the Philippine stock exchange.
In November 2006, ICTSI entered into a 10-year investment agreement with the Tartous Port General Co to operate the Tartous container terminal with an option to extend it for five years.
ICTSI set up a wholly-owned Syrian registered company, Tartous International Container Terminal Services, to conduct and manage the agreement on its behalf.
The investment agreement specifies that wars and civil disorders constitute force majeure, ICTSI said in its statement.
“The Syrian civil war is escalating, exposing everyone, both combatants and civilians, to increasing threats of death and destruction every day,” it said.
Writing off the TICT contract and remaining net assets in ICTSI’s 2012 consolidated accounts would amount to US$1.2 million.
ICTSI will, however ,save $4 million a year in port fees and cash operating expenses.
The company said: “Since 2011, ICTSI had been operating under an extremely difficult environment in Syria. Economic and business conditions in Syria have been volatile as a result of trade sanctions by the European Union and the US, and the closing for trade of the Syrian-Iraqi border.
“The port of Tartous, where TICT operates, should have been the transit point for transshipment trade to and from Iraq.”
The crisis has affected both volume growth and forecasts, said ICTSI, which stated at the time of its bid in 2005 that Syria’s container market was “growing and on track”.
Recession saw TICT’s volumes “plummet” 4% in 2010, falling a further 14% by end-2011, the onset of unrest setting back the Syrian container market to levels last seen in 2006-2007.
TICT also encountered “policy setbacks” from the Syrian government’s strategy on public-private partnership, citing delays in the government’s deliverables under the contract.
TICT and Tartous Port General Co signed an investment agreement in March 2007 under a public-private partnership structure to operate and develop the container terminal.
Until the start of the Syrian crisis, TICT “diligently fulfilled” its financial obligations to TPGC, said the Philippines-based ports group, remitting more than $13 million in port fees and rentals and paying the annual investment fee and variable fee on time.
However, when TICT saw its performance under the investment agreement derailed by the political unrest and spiralling violence in Syria from 2011, TPGC demonstrated a “refusal to acknowledge” the change of circumstances and therefore did not provide relief under the investment agreement.
“The situation in Syria has since then deteriorated into an open civil war,” ICTSI said. “To continue operations in Syria under those circumstances was clearly unsustainable and dangerous to TICT personnel.”
For the first nine months of 2012, TICT contributed 0.6% and 0.4% of ICTSI’s consolidated group volume and revenues. It accounted for 0.4% of total assets as of September 30, 2012.
ICTSI said that terminating its Syrian concession had “no bearing whatsoever on all its other port concessions worldwide, all of which are experiencing steady growth and smooth operation”.
French container line CMA CGM said that its operations at the main Syrian gateway port of Lattakia, 90km north of Tartous, “continue normally”.
In February 2009, CMA CGM announced a ten year concession agreement to manage and operate the Lattakia Container Terminal, with plans stated at the time to increase total port capacity to 1 million teu by 2012.
CMA CGM is thought to be on the verge of concluding the sale of a minority stake in its ports unit to China Merchants.