The government of President William Ruto has announced that it will revive the multi-billion JKIA Greenfield Terminal project that was canceled by former president Uhuru Kenyatta.
This was announced by Kipchumba Murkomen who is the cabinet secretary nominee for Roads and Transport during his vetting by the National Assembly Committee on Appointments.
“My priority will be to relook at the Greenfield terminal tender which was cancelled in 2016 after the contractor had been paid Sh. 4.2 billion,” Murkomen said.
The project was cancelled in March 2016 barely two years after a ground-breaking ceremony that was held on May 23, 2014.
At the time of cancellation, a down payment of Sh. 4.3 billion had been made to ACEG-CATIC JV, which was to undertake construction of the Greenfield Terminal.
The 178,000 square metres terminal would have included 50 international check-in counters, eight air bridges for aircraft to dock, 45 aircraft parking stands, and an additional runaway.
A total of Sh. 75 million was spent on ground-breaking, while Sh. 129.9 million was paid to consultant, Louise Berger. PwC received Sh. 7 million for securing the financier of the project.
Chinese firms Anhui Civil Engineering Group (ACEG) and China Aero Technology Engineering International Corporation (Catic) had been selected to build the terminal, which was expected to handle 20 million passengers a year.
Following the termination of the contract, ACEG-CATIC JV wrote to KAA demanding to be paid a total of Sh. 17.6 billion for breach of contract.
The Chinese company wanted KAA to pay Sh2 billion for the preparation of bill of quantities, Sh. 2.4 billion in additional costs, and Sh. 708.2 million value added tax charged by KRA.
The contractor demanded an additional Sh. 5.6 billion, which included the balance of the contract for the bill of quantities, value added tax, and interest and penalties. The contractor has since moved to the International Court of Arbitration seeking this compensation.
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“I will use my legal background and other available resources to take this case out of court, renegotiate the contract and possibly rebuild the greenfield terminal,” said Murkomen. “The cost may go up because we need to get new contractors to set up the Green Field terminal. We need to build a second runway.”
Murkomen further said that there is a need to expand the capacity of JKIA, which receives 7.5 million passengers compared to Ethiopia’s 15 million passengers a year.
“Rwanda is expanding its airport to receive 10 million passengers from the current 2.5 million. Ethiopia targets 100 million passengers by next year. Meanwhile, we have tents at JKIA yet we pride ourselves as a regional transport hub,” he said.
The Greenfield Terminal project was cancelled due to Kenya’s alleged failure to raise 15 per cent of the project cost, which would have unlocked the remaining 85 per cent budget that was to be provided by a consortium of local and foreign banks.
The Kenya Aviation Authority was to meet 15 per cent of the required cost, which is about Sh. 8.4 billion, while the balance of Sh. 48 billion was to come from other lenders, including the China Exim Bank, Africa Development Bank (AfDB), American Consortium AAE and Standard Bank Group.
