Kenya Cancels Plans to Build New Terminal at Main Airport

  • African Development Bank to fund design of second runway
  • Reorganization of airport expected to boost passenger capacity

Kenya’s government shelved plans to build a new terminal at the main international airport as the East African nation’s tourism industry struggles to recover from attacks by Islamist militants.

The decision to halt the project at Jomo Kenyatta International Airport in the capital, Nairobi, is the result of “prevailing economic and financial dynamics which have been on a downward trend over the last three years,” the Kenya Airports Authority said Tuesday in a statement on its Twitter account.

When the project was announced in 2014, the authority said it would cost $653 million and have the capacity to handle 20 million passengers.

The number of visitors to Kenya dropped for the fourth straight year in 2015 to 748,710, down 41 percent from 2011, according to Kenya National Bureau of Statistics data. Tourists have been scared by attacks by al-Qaeda-linked insurgents, including the assault on the upmarket Westgate mall in Nairobi in September 2013.

JKIA, as the airport is known, currently has capacity to handle 7.5 million passengers, 1 million more than passed through it last year, according to the authority. The “reorganization and modernization” of existing infrastructure is expected to raise capacity to 10.5 million people, the KAA said.

The authority also said the airport is expected to achieve Category 1 status by May, enabling the facility to handle direct flights to the U.S.

African Development Bank, one of the financiers of the canceled terminal, hasn’t lost any money because it hadn’t disbursed any funds, Eastern Africa Regional Director Gabriel Negatu told reporters in Nairobi on Wednesday.

“Kenya has made a national economic decision to make a second runway,” Negatu said. “AfDB will fund the design of the new second runway.”

Before it's here, it's on the Bloomberg Terminal.