Ghanaian News

$57.44m KIA expansion project suspended

A historic $57.44 million project meant to expand the Kotoka International Airport (KIA) to accommodate aircraft of varying sizes, including the biggest commercial airplane in the world, has been suspended indefinitely.

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This follows the delay in the release of funds by the Ghana Airports Company Limited (GACL) to complete the project on schedule.

The target was to complete construction works to create space for more aircraft before the end of the first quarter of 2021.

However, due to delays in honouring payment, the contractor working on the project, Messrs Amandi Holding Limited, has halted operations on the site after completing about 31 per cent of the works.

It is being constructed with funding from the internally generated funds (IGF) of the GACL raised from the usage of the airport by airlines and passengers.

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GACL response
The Managing Director (MD) of the GACL, Yvonne Nana Afriyie Opare, who responded to the Daily Graphic’s queries dated February 7, 2024, pursuant to the Right to Information (RTI) Act 2019 (Act 989), stated that after 31 per cent of the construction works was completed, the project had been suspended due to delayed payment.

She said the project would resume subject to availability of funds.

“The original completion date was August 21, 2022. Revised completion date to be determined subject to availability of funds,” the RTI response stated.

Blame COVID-19
An international aviation expert, Sean Mendis, said it was not surprising that the project was suspended because the COVID-19 pandemic had wiped away the already stressed IGF of the Airports Company.

Even before the project started, he said the GACL was using its IGF to service the $250 million loan secured for the construction of the KIA Terminal Three project.

“The revenue collected by the GACL from air travel and other usage of the airports was blocked in 2020 following the suspension of commercial flights for six months as part of restrictions on movement to contain the spread of COVID-19.

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“The apron project is fortunately not an immediate priority from a safety or critical infrastructure perspective at this time.

“We have seen that 2023 numbers are back to pre-pandemic level for international traffic, so hopefully the 2024 revenues of the GACL will increase significantly in order to refocus on the project,” Mr Mendis added.

GACL faulted
However, a banking consultant, Dr Richmond Atuahene, disagreed and stated that the project delayed because the client (GACL) did not address cost or budget overrun before work started on site.

That, he said, had resulted in the delay or failure of the project and not necessarily COVID-19 affecting IGF.

He explained that in project financing, one of the important risks that needed to be resolved was cost overrun for the project to continue in times of difficulties.

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