JKIA Sh56bn terminal back on the radarWednesday November 14 2012
Construction of the controversial $653 million (Sh56 billion) Greenfields terminal could start next year with the Kenya Airports Authority expecting to close the financing deals by Christmas.
Work at the terminal whose tendering was at the centre of a row between various government agencies in September is now expected to take off in November 2013.
The terminal is expected to give the airport an extra handling capacity of 20 million passengers annually.
Also read: Money clouds airport tender after Anhui win
The project manager, Francis Ngigi, said a number of financiers had been selected and a decision would be made next month.
“We are in advanced negotiations having identified a number of international lenders based on their loan terms. We will be making the final decision in December,” said Mr Ngigi. He was speaking during a media tour of JKIA’s ongoing expansion at the new Terminal 4.
He said domestic lenders were overlooked because they did not have the capacity to extend loans with repayment periods of up to twenty years.
He declined to give details on which financiers were being considered although KAA managing director Stephen Gichuki had let out that the China Development Bank was one of them.
KAA said the debt would be serviced through a the passenger service charge that was increased from $20 (Sh1,700) to $40 (Sh3,400) in July.
The Authority expects to earn about Sh6.7 billion per year, an important cash flow base to convince lenders of its ability to pay.
Mr Gichuki said Treasury would only be brought on board if the selected financier requested guarantees from the Kenyan government.
The project caused an uproar when it emerged that the tender for the construction of the terminal was given to two Chinese companies by the KAA management last December without the approval of the Board.
With apparent competing interests within the Kenya government and the aviation sector at play for the award of the tender, Mr Gichuki was temporarily sacked before being reinstated by the Industrial Court.
Later Public Procurement Oversight Authority (PPOA) ruled that the tenders to Anhui Construction Engineering Group (ACEG) and state-owned China National Aero-Technology International Engineering Corporation (Catic) were above board and KAA should sign contracts with the firms.
The two firms will be undertaking the project in collaboration with Pascall + Watson Architects under the supervision of Washington DC’s Louis Berger Group.
If the project is delayed, KAA would be forced to construct a temporary terminal to accommodate growing passenger numbers.
KAA is already said to be revising its budgets for such an eventuality, with the proposal expected to be approved by the authority’s board later this month.
“If we do not get to start the greenfield terminal in time we will be forced to build the temporary terminal which is an option still open to us,” said Eng Ngigi.
The $110 million (Sh9.4 billion) terminal 4 is said to be 56 per cent complete and due for commissioning in August next year.
It is expected to handle 2.5 million passengers. Construction of parking bays at a cost of Sh2.4 billion is also ongoing and is expected to be complete around the same time.
The other three terminals handle 7 million passengers, nearly three times the combined capacity of 2.5 million passengers. The three terminals will be renovated at a cost of Sh7.9 billion when Terminal Four is operational.
Other projects on the pipeline include a second runway which is set to begin in June 2013 and whose cost is expected to be $150 million (Sh12.8 billion) – fully funded by the government in the form of a grant.
“The runway will be 5,500 meters, enabling operation of direct flights to New York. It will also have advanced technology that allows planes to land in the dark,” said KAA.