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Business News of Tuesday, 16 April 2019


Government to save €4m from Kumasi Airport project

The government could save an amount of €4million if it combines phase two and three of the Kumasi Airport redevelopment project, the Ghana Airport Company has indicated.

In addition, combining the two phases is expected to ensure that interruptions to operations and lags in the delivery schedule are minimised.

It would be recalled that at the conception stages of the project, a decision was taken to divide the project into three phases due to the government’s economic management agreement with the International Monetary Fund (IMF) which had set limits on borrowing.

With the IMF programme now over and phase two of the project currently ongoing, the Ghana Airport Company Limited (GACL) has, therefore, advised the government to allow it to combine the phase three with the phase two and deliver both phases concurrently.

GACL also believes that combining the two phases would eliminate constructional interruptions on the terminal once the airport is inaugurated.

Phase two of the projects involves the building of a new passenger terminal and landside, the building of a parking lot and access road, and an extension of the runway and related infrastructure, while the phase three involves the building of new air control tower, two new boarding bridges, new fire station and a runway strip.

This came to light when officials of GACL and the Ministry of Aviation met with the Parliamentary Select Committee on roads and transport to discuss the contract agreement between the Government of Ghana and Contracta Construction UK Limited for a contract of €58.9 million meant for the execution of phase three of the Kumasi Airport redevelopment project.

Additional funding

The committee noted that based on preliminary discussion between GACL, the Ministry of Aviation sent a request for additional funding for phase three of the project.

The Ministry of Finance then subsequently engaged the Deutsche Bank, London and mandated them to structure and export credit facility to finance the project as a contract price of €58.9 million.

The committee observed that the GACL, which would ultimately own and operate the Kumasi airport, was currently faced with some funding constraints due to the servicing of commercial loans contracted to finance the Kotoka International Airport (KIA) terminal three and the Ho Airport projects.

It is against this background that the Ministry of Finance is securing funding for the Kumasi Airport project for on-lending to the GACL

Benefits of project

The development of the Kumasi Airport is expected to transform it into a strategic commercial airport that will link the sub-region and facilitate the movement of people and goods, as well as attract more investment which would lead to job creation and catalyse for economic growth.

It is also expected to boost the agricultural sector and leverage the export of fresh produce and support an agro-based national strategic goal.

The project would also help facilitate growth in domestic air travel and serve as one of the key national spokes to KIA and open up the enormous potential growth of traffic in domestic and regional routes, in support of KIA as an aviation hub within West Africa.

The tourism sector is also expected to get a huge boost to support its full realization of the great potential of tourist and cultural sites, especially in the Ashanti, Bono and Ahafo regions.