The Ministry of Transport says that although the project has not been cancelled, the government is deliberating on its economic viability before it embarks on what it terms “capital intensive venture”.
The construction was supposed to start in the current quarter and tenders had already been floated, with over 50 firms bidding.
The Greenfield terminal project was to meet the needs of the increasing number of passengers passing through Kenya’s main airport.
It was to be built by a Chinese firm over a period of 36 months.
The construction of the Sh22 billion second runway at the Jomo Kenyatta International Airport is in limbo following the government’s move to hold the process to review its economic value.
This comes just two years after the government cancelled plans for the constructing of a Sh56 billion Green Field terminal at the airport, saying there was no value for money in putting up the project, and opted for construction of the second runway instead.
The Ministry of Transport says that although the project has not been cancelled, the government is deliberating on its economic viability before it embarks on what it terms “capital intensive venture”.
The construction was supposed to start in the current quarter and tenders had already been floated, with over 50 firms bidding.
“We have not cancelled the project. What we are doing right now is to deliberate on the full economic value of this project against other things,” said Transport and Infrastructure Principal Secretary Paul Maringa.
The Kenya Airports Authority (KAA) had already secured funding from African Development Bank (AFDB) for the runway. The bank approved Sh16 billion loan in November last year with the government topping up 20 per cent of the total cost.
“This is a heavy investment project and we have to be sure of its value before we embark on it, just to ensure that we get it right,” he added.
Prof Maringa said they want to understand the effectiveness of investing Sh21.9 billion on the runway against other projects, which he did not explain.
In February, KAA announced that the cost of the runway had been revised downwards from Sh37 billion to Sh21.9 billion.
If the proposed runway is cancelled, it will mark the second major project at JKIA to be financed by AFDB to have been abandoned by the ministry. The Green Field Terminal project was cancelled in 2016.
The Transport ministry said in March 2016 that the cancellation of the plan was informed by a finding that the terminal would yield little value for money and that the funds were better used at constructing a second runway.
“We have stopped the Greenfield project because it has no value for money. We would rather spend that cash building a second runway as opposed to a new facility,” said Transport Cabinet Secretary James Macharia in 2016.
The Greenfield terminal project was to meet the needs of the increasing number of passengers passing through Kenya’s main airport. It was to be built by a Chinese firm over a period of 36 months.
KAA managing director Johnny Andersen told the Business Daily in February that they would award the multibillion shilling tender for construction of the runway within a month, paving the way for expansion of the country’s major port of entry.
“We have received more than 50 bids and we expect to award the tender in the next one month,” said Mr Andersen in February this year.
Kenya’s delay with the expansion of JKIA comes at a time when regional countries are revampoing their airport infrastructure as they position themselves to attract global airlines.
Expansion of Tanzania’s main airport is currently on course, a project likely to reduce Dar es Salaam’s reliance on Nairobi for transit flights by some of European airlines.
Authorities in Tanzania have announced that the construction of the new passenger terminal at the Julius Nyerere International Airport (JNIA) will be completed in June 2019.
The $300 million (Sh30.27 billion) project had been delayed over a funding stand-off after President John Magufuli questioned its costs and implementation timeframes in February last year.
The new Bugesera Airport in Rwanda will have a 13 per cent higher passenger capacity than Kigali International Airport.
JKIA registered a marginal growth on transit passengers last year, on transiting passengers destined to other regions.
Recent data from the Kenya National Bureau of Statistics indicate that the number of international passengers on transit increased by 2.7 per cent from 1.2 million in 2016 to 1.25 million last year.
The JKIA is a major hub for passengers connecting to Europe, US and even the Middle East.
