One of Kenya’s infrastructure megaprojects – the Jomo Kenyatta International Airport (JKIA) greenfield terminal – is in limbo following government’s refusal to guarantee a loan to the project’s developer, the Kenya Airports Authority (KAA), prompting the would-be financiers to walk away.
The $700-million futuristic terminal is designed to make Kenya the hub of air transport in East Africa.
The project, being implemented by Chinese giant Anhui Construction Engineering Group, has now stalled and there are no clear indications as to whether it will proceed.
Doubts about the Kenyan government’s commitment to the project started arising after the country’s Treasury failed to allocate funds for the project in the 2016/17 Budget. The Kenyan government is supposed raise 30% of the total financing.
The greenfield terminal project was conceived by the previous administration of President Mwai Kibaki, and the current government, led by President Uhuru Kenyatta, does not view it as a top priority.
According to KAA acting MD Yatich Kangugo, the would-be financiers, who include the African Development Bank (AfDB), want government to guarantee the loans they are willing to extend to the KAA, but the National Treasury is adamant that the airports company has a strong balance sheet that can support the loan.
“The financiers want commitment from government in terms of guaranteeing the loan. This has not been forthcoming, but we remain optimistic,” he says, adding that the KAA is exploring other financing options.
In 2014, the Kenyan government appointed the AfDB as the lead financier, with the mandate to identify other financiers willing to form a consortium to fund the project.
International financiers like China Exim Bank, the China Development Bank and the US’s AAE expressed interest in the project.
Besides financing issues, the project has also been engulfed in numerous procurement controversies.
Conceived in 2011, the greenfield terminal was designed by Pascall+Watson, of the UK, as a futurist terminal that would transform JKIA into a competitive regional hub that would allow for efficient connectivity for transiting passengers.
The 178 000 m2 terminal would boast facilities like 50 international check-in counters, 32 contact and eight remote gates and associated aprons, with 45 aircraft stands and linking taxiways, besides others.
The terminal would enable JKIA to handle more passengers, making Kenya a preferred hub for air transport.
Government projections indicate that the number of passengers passing through JKIA would increase from 6-million currently to 35- million by 2030, while the volume of cargo handled would increase from 300 000 t to over one-million tons a year.