Companies

KAA plans Sh1.3bn complex at Mombasa airport

The Kenya Airports Authority (KAA) plans to set up a Sh1.3 billion retail complex at Mombasa’s Moi International Airport to serve travellers.

The construction of the complex is expected to start soon, following the award of the tender to Greenhills Investment —a Kenya developer that runs the Village Market complex and Tribe Hotel in Gigiri.

The complex will sit on a five acre-piece of land and will have a supermarket, offices and a hotel.

“We will develop the complex through a public-private partnership with Greenhills,” said Bernard Mogambi, KAA’s general manager for marketing and business development.

“We look to break ground towards year end.” Mr Mogambi, however, did not disclose whether the cost would be shared or be solely shouldered by the private developer with the option of recouping the expenditure from operating the facility for some time before handing it over to the authority in a build-operate-transfer model.

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Mombasa airport handles 1.5 million passengers per year with half being foreign visitors out to cut business deals or on holiday.

In recent months, the facility has witnessed a drop in number of travellers especially from overseas on security concerns following a string of terror attacks at the coastal town.

KAA which constructs, operates and manages all airports in the country, is racing to shore up its revenues by opening new financial streams including attracting investors to set up businesses on airport land.

Last year, KAA collected Sh11 billion in revenues with fees and charges on aeroplanes and passengers accounting for 80 per cent. Passenger service charges remain the single largest source of revenues for KAA at Sh7.8 billion in 2013.

KAA currently depends on passenger traffic, meaning low passenger traffic translates to subdued returns, hence the strategy rethink.

Others sources of revenue include advertising, ground handling fees, sale of aviation fuel, land and buildings rent, car packing and in-flight catering.