Why the Ksh.55 billion JKIA Greenfield Terminal project never took off

On August 7, 2013, a mysterious fire razed the arrivals terminal of the Jomo Kenyatta International Airport (JKIA).

The dawn fire led to the unprecedented closure of Kenya’s main airport. It was a major disruption to one of Kenya’s main foreign exchange earners – tourism - but it also brought to the fore the need for a bigger and more modern airport.

The fire forced Kenyan authorities to explore makeshift options to keep the airport operational.

A parking building was converted to an arrivals terminal and prefabricated plastic structures were erected to serve as departure terminals for international as well as local flights.

But this would probably have not been the despair had the Kenyan government followed its own Vision 2030 plans.

Modernization of the JKIA, complete with a new terminal named Greenfield was part of those plans.

The JKIA plan had been set in motion as far back as June 2011 when the Kenya Airports Authority (KAA) advertised an international tender for the design and construction of a new terminal; 110 firms expressed interest in the project.

Between the tender advertisement and the eventual groundbreaking in December 2013, the process was riddled with controversy.

Following a change in Transport ministers from the late John Michuki to Amos Kimunya, the process was cancelled. The Transport ministry ordered the airports authority to have the tender cancelled and instituted afresh.

This directive was ignored and Anhui Construction, a Chinese firm, was awarded the tender to begin construction in December 2011. This was later revoked by Kimunya.

On January 20, 2012, the Ethics and Anti-Corruption Commission (EACC) launched investigations after claims that the award of the contract was riddled with corrupt dealings.

In August that same year (2012), Kimunya gazetted a new steering committee to oversee implementation of the project.

The KAA Managing director at the time, Stephen Gichuki, was sent on compulsory leave for failing to implement a directive by Kimunya to have the tender cancelled.

However, the minister’s decision was overturned by the industrial court seeing Gichuki reinstated and the plan now seemingly clear for take off.

And on December 3rd, 2013, less than a week after the launch of the Standard Gauge Railway (SGR) construction, President Uhuru Kenyatta officiated the ground-breaking ceremony of the Ksh.55 billion project at JKIA.

“This airport will provide airlines with the services they require for efficient operations, speed and comfort for their passengers,” President Kenyatta said then.

DP Ruto, on his part, said: “This facility will actually confirm Kenya’s place as the hub of this region.”

The new terminal would have increased JKIA’s passenger capacity by an additional 20 million people, making it one of the biggest aviation hubs on the continent.

It would have featured 50 international check-in counters, eight air bridges for docking aircraft, and 45 aircraft parking stand. It would also add another runway to JKIA.

Two Chinese contractors, Anhui Civil Engineering Group and China Aero Technology Engineering International Corp, were tasked with construction of the 178,000-square-metre terminal that was designed by Pascall and Watson of London.

The expected completion date was set for 2017.

And so the search for funds to construct the new terminal began.

By March 2014, the KAA board was in negotiations with the China Exim Bank, Africa Development Bank, American consortium AAE and Standard Bank Group.

Of the total cost, KAA was expected to raise 15 per cent, equivalent to Ksh.8.4 billion, through a public private partnership. The other Ksh.48 billion the authority hoped to get from the four financiers.

In February 2015, the project hit a snag after new evidence emerged of an over Ksh.9 billion variance in the contract for the new terminal.

The revelation came a few days after KAA sent home four top managers to pave the way for investigations into corruption allegations at JKIA.

By May 2015, following EACC investigations, the terminal project was cleared of corruption allegations, with anti-corruption body recommending that the file be closed.

Almost a year later however, KAA terminated the contract for the new terminal; the reason, economic constraints over the course of three years.

“The decision to terminate the project has been occasioned by prevailing operational, economic and financial dynamics over the last three years,” read a statement from KAA then.

This was after the contractor, China Aero-Technology Import and Export Corporation, had already excavated the foundation and mobilized 90 per cent of the equipment needed for construction.

Questions would arise on how much KAA would have to pay the firm for the untimely termination of the contract.

In June of 2018, now two years later, KAA management was put to task by lawmakers over cancellation of the Greenfield terminal project.

While appearing before the Public Investments Committee (PIC) Jonny Andersen, the KAA Chief Executive Officer at the time, revealed Ksh.4.3 billion was paid to the contractor as part of the advance payment provided for in the contract agreement.

Another Ksh.129.9 million was paid to consultants for project supervision and design review fees, while still another Ksh.75 million was spent on the groundbreaking ceremony.

In May of 2019 the contractors, Anhui Construction Engineering Group Ltd and China Aero-Technology International Engineering Corporation, demanded Ksh.17 billion in compensation for the cancellation of their contract.

KAA MD Jonny Andersen however said the claims had not been verified and that the authority was actually seeking a Ksh.4.3 billion refund from the firm.

To date there is no word on whether the matter was settled or what the Public Investment Committee gathered from its probe into the cancellation of the project.

That’s your National Reminder, lest you forget.