Why Uhuru killed Sh56bn Greenfield Terminal project

President Uhuru Kenyatta.
President Uhuru Kenyatta. PHOTO/FILE
President Uhuru Kenyatta’s government has scrapped plans to construct a Sh56 billion terminal building at the Jomo Kenyatta International Airport (JKIA) in Nairobi due to lack of funds, according to a source briefed on the matter.

The source told the Construction Business Review that the Cabinet arrived at the decision after Kenya failed to raise 15 per cent of the entire project cost, which would have unlocked the remaining 85 per cent funding that was to be provided by a consortium of local and foreign banks, including the African Development Bank (AfDB).

There was also the contentious issue of the project’s total cost, which was perceived by a section of the Cabinet as “too high” to be economically viable.

But in a statement sent to newsrooms on Tuesday, the Kenya Airports Authority, which manages all Kenyan airports, said the project had been stopped due to excess capacity caused by recent upgrades to existing facilities at the JKIA.

The KAA contradicted Transport CS James Macharia’s assertion that the cancellation was informed by a recent study that found that the Greenfield Terminal would yield no value for money.

“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,” Mr Macharia told the Business Daily last week.

The 178,000 square metres terminal, which was launched by President Kenyatta in December 2013, would have given JKIA an extra handling capacity of 20 million passengers a year.

The facility that was to be completed next year would have included 50 international check-in counters, eight air bridges for aircraft to dock, 45 aircraft parking stands on the linked apron space and an additional runaway.

The project failed to kick off after the December 2013 launch when it emerged that the tenders for its construction were awarded to two Chinese firms by KAA management without the approval of the Authority’s board.

The Public Procurement Oversight Authority later ruled that the tenders awarded to China’s Anhui Construction and China National Aero-Technology International Engineering Corporation (Catic) were above board paving the way for the signing of contracts with the two firms.

The contractors, who have already mobilised 90 per cent of the equipment required for the execution of the work, were to set up the Greenfield Terminal in collaboration with London-based Pascall+Watson Architects under the supervision of Loius Berger Group – which is based in Washington DC.