KAA signs Sh55bn deal for new airport terminal
What you need to know:
- KAA argues that it put into consideration the business development strategy of the national carrier, Kenya Airways, in deciding on the master plan.
- However, Kenya Airways (KQ) and the Vision 2030 secretariat have opposed the design being floated by the company which won the tender raising questions on the nature of consultations that took place with KQ.
- Vision 2030 director-general Mugo Kibati has also said that his institution had nothing against the tender process but was opposed to the design of the new airport terminal on grounds that it is unfavourable for the expansion strategy of Kenya Airways.
Kenya Airports Authority (KAA) has signed the contract for the Sh55 billion airport tender with a Chinese firm in what is promising to bring to an end the controversy that has dogged the project for months.
A day after the Cabinet gave the go-ahead for the new terminal at the Jomo Kenyatta International Airport, the KAA moved to complete the deal for the project. The project – the Greenfield Terminal – is expected to take three years.
It will be undertaken by Anhui Construction Engineering Group (ACEG) in a joint venture with another Chinese firm, China National Aero-Technology International Engineering Corporation (CATIC).
“All works under this contract shall be completed within a period of thirty-six months from the commencement as laid down under the contract,” the contract document signed by KAA managing director Stephen Gichuki says in part.
There was, however, no witness signature on the document which was also signed by Huans Hong You, the project manager and contractor on the side of Anhui Construction.
Anhui has indicated that it is open to any suggestions for improvements in the design but it maintains that those changes must come from KAA.
“The design we are working with is what we submitted as part of the tender documents. Nevertheless we are ready to make any adjustments as may be required but that can only be done after a formal request is done by the client,” Mr Hong You said in a phone interview with the Sunday Nation.
It was not immediately clear how far the firm will be willing to change the design given that such changes have an impact on the cost of the project which has already been inflated by 30 per cent.
KAA argues that it put into consideration the business development strategy of the national carrier, Kenya Airways, in deciding on the master plan.
However, Kenya Airways (KQ) and the Vision 2030 secretariat have opposed the design being floated by the company which won the tender raising questions on the nature of consultations that took place with KQ.
Vision 2030 director-general Mugo Kibati has also said that his institution had nothing against the tender process but was opposed to the design of the new airport terminal on grounds that it is unfavourable for the expansion strategy of Kenya Airways.
According to the contract seen by the Sunday Nation, the project shall be subject to stakeholders’ input as had been directed by the Cabinet, but the engagement shall only be before the start of the works. (READ: Cabinet: Fast track airport expansion project)
The contract cost is $653,782,814.57, translating to Sh55.17 billion at the current foreign exchange rates.
This contract sum is inclusive of 10 per cent contingencies for the works, 5 per cent for employer’s supervision consultant and all applicable taxes. But it is exclusive of the 16 per cent Value Added Tax (VAT).
The Sunday Nation broke the story of Transport minister Amos Kimunya ordering the cancellation of the tender arguing that the deal was rushed.
The varied interests surrounding the project soon sucked in almost all relevant government ministries including the office of the Prime minister, the Inspector- General of state corporations, the courts, the procurement appeal’s board, the anti-corruption watchdog, the Attorney-General and the Public Procurement Oversight Authority (PPOA).
The Transport ministry and KAA board were left with egg in the face when a Parliamentary committee that was investigating why they wanted the tender cancelled okayed the deal as had the procurement and anti-corruption watchdogs.
As late as Wednesday, the board was determined to see the deal stopped when it moved to the courts seeking orders to stop the Public Procurement Administrative Review Board from forcing it to sign the contract. It argued that there was no money for the project.
The new terminal is Kenya’s single largest and most important project in the aviation sector since 1978.
“The project will also ensure that Kenya maintains its competitive edge as the regional transport hub,” read a statement from the Presidential Press Service sent to newsrooms on Saturday.
