The contractor for the bungled Sh56
billion Greenfield Terminal airport
project failed to secure funds leading
to its collapse, the Star has established.
Kenya Airports Authority management
officially terminated the project
yesterday, ending Kenya’s dream of
having the largest terminal in Africa.
KAA board yesterday said Chinese
firm – Anhui Construction Company
– was supposed to secure $600 million
(Sh60.9 billion under current exchange
rate) before the project started
at Nairobi’s Jomo Kenyatta International
Airport.
Bidders for the tender were
to submit a letter of intent to finance
the project from a reputable financier.
Anhui which presented two institutions
– China Exim Bank and China
Development Bank – however, failed to
secure the funds.
“The agreement was that whoever
wins the contract was to give a sovereign
guarantee that they can secure
funds for the project.
Finances were, however, not secured so the project
could not kick off,” KAA chairman David
Kimaiyo said on phone.
In a statement, acting MD Yatich
Kangugo cited prevailing operational,
economic and financial dynamics in
the aviation industry, which have been
on a downward trend over the last
three years, as reasons for termination
of the project.
The project was to be
completed by next year.
The board, which held an unusual
sitting on the evening of Easter Monday,
had already stopped payments to
Anhui, according to a source.
The company is said to have withdrawn
$4 million (Sh405.9 million)
from KAA before the project took off,
after it moved to site on September 14,
2013.
Kimaiyo said investigations are underway
to establish if any payments
were made.
He dismissed concerns that Kenyans
risk losing an estimated Sh15 billion
over the decision to end the contract.
“In terms of compensation the law
will be followed. Even the contractor
may pay the government,” Kimaiyo
said.