• Transport CS James Macharia says cost-benefit analysis being discussed.
• Hints the government could consider dropping the project.
The government is analysing the benefits of the stalled JKIA project and its cost.
Kenya risks losing Sh4.3 billion in the Greenfield terminal project.
This follows termination of the Sh64 billion tender awarded to two Chinese firms — Anhui Construction Engineering Group and China Aero-Technology International Engineering Corporation.
On Friday, Transport CS James Macharia said cost-benefit analysis is being discussed.
"We are looking at the cost of the project vis-à-vis the benefits and our financial obligations,"Macharia said.
The CS said the way forward on the Greenfield Terminal will be agreed on after issues surrounding it have been ironed out.
He however hinted the government could consider dropping the project.
"What is important for JKIA is to make sure that current terminals are properly utilized. We have passengers like five million coming in every year but those terminals have got the capacity of up to 12 million passengers,"Macharia said.
JKIA has five terminals, which are A, B, C, D and E.
"We do not need another terminal right now. But in the future, we may do and when we do, the most likely option is for the private sector to do it,"he said.
Macharia said airports are very lucrative in terms of business.
Economic Survey 2019 shows the number of passengers passing through JKIA increased by 9.6 per cent to eight million in 2018.
Mombasa International Airport increased by 25 per cent to 1.5 million during the review period.
The number of passengers handled in other airports increased by 37.5 per cent from 1.6 million in 2017 to 2.2 million in 2018.
The National Assembly’s Public Investments Committee has summoned governors Francis Kimemia of Nyandarua and Embu’s Martin Wambora to shed light on the project.
Wambora was Kenya Airports Authority chairman at the time it was initiated.
Kimemia issued communication contradicting the board’s position that the project be cancelled.
On May 8, the committee chaired by Mvita MP Abdulswamad Nassir warned that taxpayers may lose more money should the contractor seek damages following the terminated tender.
The project was cancelled in March 2016 by Macharia, citing non-viability. Grass has overgrown the site.
But when KAA officials led by managing director Johnny Andersen met the MPs , it was revealed that the office of former Prime Minister Raila Odinga warned against the venture, saying it was unviable.
The ex-PM, through former Transport PS Cyrus Njiru, wrote to KAA in November 2011, warning against the contract prior to it being awarded to the Chinese firms.
The PS asked KAA to stop the tendering process as there was no money to implement the project. But the tendering committee proceeded to issue the award to the Chinese firms the following month.
The board, then chaired by Wambora, later advised the tender committee to terminate the contract after it became untenable.
Then KAA managing director Stephen Gichuki opposed the termination as was decided by the tender committee in April 2012.
Former AG Githu Muigai in his advisory to the MD who had sought his advice said the tender cancellation was likely to attract a lawsuit since an agreement had been reached with the airports authority.
Back and forth communications on the matter showed that Kimemia, who was then Head of Civil Service, in July 2012 also insisted on the same, warning that the cancellation would cast the Cabinet in bad light.
By the time of cancellation, Sh4.3 billion had already been paid to the Chinese contractors: Sh75 million for the groundbreaking presided over by President Uhuru Kenyatta; Sh129 million to consultants, and Sh7 million to PriceWaterhouseCoopers.
Meanwhile, Macharia said the construction of Mombasa-Nairobi superhighway is still under discussion.
"We signed a financial agreement with American partner. The agreement helps parties to go into financial discussions,"Macharia said.
The project will cost at least Sh 280 billion with Bechtel Corporation of America proposed to undertake the work.
The CS said financial structures were being negotiated.