Construction of the highly anticipated Bugesera International Airport is scheduled to start in June next year, following the signing of an agreement between the government and Mota Engil Engenharia e Construcao Africa SA, a Portuguese firm that deals in civil construction, port operations and logistics.
The two parties signed the agreement last evening at the Ministry of Finance and Economic Affairs in Kigali.
The recently formed Aviation Travel and Logistics Holdings Limited (ATL) signed the deal on behalf of the government.
The deal will see Mota Engil Engenharia e Construcao Africa SA finance, and construct and complete the airport by December 2018 and later run the facility’s operations for 25 years with an option to extend by another 15 years.
Under the agreement, the government will not incur costs to put up the facility while the Portuguese firm is expected to recoup their investment by running operations.
Manuel Mota, the chief executive of the Portuguese company, said they intend to spend US$418 million in the first phase, which is expected to deliver a facility of international standards with capacity to handle about 1.7 million passengers every year.
Upon completion of the first phase, in December 2018, Mota said that they will commence expansion works which will increase the airport’s capacity to 4.5 million passengers per year and costing an additional USD US$400 million.
That would bring the amount spent on the whole project to US$818 million.
Citing the tight deadline to complete the facility (within 28 months), Mota termed it as a “fast-track project”.
“The groundbreaking will be in June next year as we await securing finance but before that we will be starting some preparatory works in partnership with the government,” Mota said.
The Minister for Infrastructure James Musoni, emphasised the urgency for the proposed airport saying it will help accommodate the ever-growing air traffic in a country that’s on its march to becoming a major conference and business hub.
“More than ever, we need an airport that can match the growth we are witnessing in the aviation industry,” Musoni said.
He expressed confidence in the firm’s capacity, saying they had performed well in a project to expand the Kigali International Airport, the country’s only international airport at the moment.
He allayed fears that the airport project could experience delays as was the case with the Kigali Convention Centre saying that the experience garnered putting up the latter offered invaluable lessons to the government with regard to undertaking of large projects.
The Minister for Finance and Economic Planning, Amb. Claver Gatete, said that the choice of the Public-Private Partnership model in the execution of the Bugesera International Airport project – as opposed to government borrowing money to put up the facility – was informed by the need to speed up the proposed facility’s development and to increase its profitability.
“The government has been investing heavily from the money we generate from taxes, and from loans and grants. But then we have reached a level where we need to develop faster. Whenever we do business in joint ventures with the private sector, we can achieve much more with less,” he said.
“That is how we can grow faster. For big projects that are expected to generate significant profits, we always want to give a chance to the private sector,” Gatete said.
Amb. Gatete said that by working closely with the private sector in such major undertakings, the government gives comfort to investors on the viability of such project.
The minister said that much of the expropriation of people living in the area designated for the proposed airport had already been done while the few remaining cases would also be concluded soon.
He said only about 10 households were still pending.
Thirteen households that had their payments delayed owing to incomplete bank accounts were in the process of receiving their money after the government transferred it to a Bugesera District account.
The Rwanda Development Board chief executive Francis Gatare said the signing of the agreement was a vote of confidence in the Rwandan economy, adding that the planned airport would boost the aviation industry.
Jean Paul Nyirubutama, the acting chief executive of the recently formed Aviation Travel and Logistics Holdings Limited (ATL), allayed fears that the airline business across the African continent was slowing down saying that it was just a temporary headwind largely brought about by economic challenges.
“The aviation industry across the continent might be going through headwinds which are just temporary and caused by the general economic situation in Africa, but airlines in Africa are set to grow given that the continent is the next frontier of aviation and the growth rate is high enough to accommodate carriers in Africa,” Nyirubutama said.
He said that the national carrier, RwandAir, was positioning itself for stronger growth prospects by expanding its presence globally, including opening flights to underserved African destinations.
Today, RwandAir will make its inaugural flight to Benin as part of that effort.
Aviation Travel and Logistics Holdings Limited (ATL) is a holding company recently approved by cabinet to oversee management of RwandAir, Airports and Akagera Aviation training facilities.