The Transport ministry appears to be speaking from both sides of the mouth on the contract cancellation of a new Sh56 billion terminal at the Jomo Kenyatta International Airport (JKIA) in Nairobi.
On Friday, Transport Cabinet Secretary James Macharia was quoted in the Business Daily saying that the contract for the new terminal, one of the Vision 2030 projects, had been cancelled.
“We have stopped the Greeneld project because it has no value for money. We would rather spend that cash building a second runway as opposed to a new facility,” he said.
But speaking to Sunday Nation, Mr Macharia’s Principal Secretary Irungu Nyakera said the contract had not been cancelled but that the government was only going slow on it.
“We didn’t say we are cancelling, just that there are priority projects on the back of limited resources. GFT (Greenfield terminal) is a necessity if JKIA is to be an iconic airport and Nairobi an African hub,” Mr Nyakera said.
The PS added that the contract with the Chinese company Anhui Construction Engineering Group Ltd was not stopping “but pursued with limited funding realities being at the forefront.”
Mr Nyakera said the CS had been misquoted. “He was misquoted. You can contact him again…There is a lot of confusion. (I) hope you will clarify and not add to it.”
The confusion comes at a time Anhui Construction Engineering Group Ltd is reported to be considering a major legal battle against the government for breach of contract.
The contract was entered into between Kenya Airports Authority (KAA) and Anhui on November 13, 2013 though the site had been handed over to the contractor two months earlier on September 14, 2013 the same day President Uhuru Kenyatta presided over the ground-breaking ceremony.
Kenya reached a financing agreement with China Development Bank for the project during President Kenyatta’s State visit to China in August 2013.
While in China, the President is said to have held a meeting with China Development Bank president and they agreed to fast-track the financing agreement.
Kenya picked China Development Bank over China Exim Bank.
In the interview with Business Daily, Mr Macharia was quoted saying the Sh56bn project would yield little value and a second runway was more viable.
He did not, however, explain where that second runway will be constructed within JKIA or who will do it.
The Chinese contractor on March 1 wrote to KAA acting managing director Mr Yatich Kangugo giving 30 days, failure to which they would remove their equipment at a cost of more than Sh600 million charged on the government.
In the letter, Anhui’s site agent Mu Yunqing accused KAA of reneging on the terms of the contract and ignoring their formal reminders for release of funds.
The Chinese contractor stated that it was unable to carry on with the works at the Greenfield terminal unless the government clears outstanding dues totalling Sh4.4 billion and gives a clear roadmap on how future payments would be made.