Ten things we know about the Rwanda-Qatar Airways deal

An artistic impression the proposed international airport in Bugesera District. (Courtesy)

Rwanda and Qatar Airways on Monday signed three agreements that saw the two parties set up a joint venture to build, own, and operate the proposed international airport in Bugesera District. 

It is the same facility that has been under construction under the name Bugesera International Airport but now a new name will be communicated in the coming days, according to officials.

President Paul Kagame and the Emir of Qatar, High Highness Sheikh Tamim Bin Hamad Al Thani, witnessed the signing of the three agreements in the capital Kigali during the latter’s visit to Rwanda.

So what are these agreements about specifically? Infrastructure minister Amb. Claver Gatete broke them down for The New Times and we take a sneak-peek into each one of them.   

1. What specific agreements were signed?

First is a shareholders’ agreement on the nature of partnership under which Rwanda holds a 40 per cent stake in the proposed international airport, while Qatar Airways holds a majority stake, at 60 per cent.

The second is a share purchase agreement. Initially, when the airport project started about two years ago under the Bugesera Airport Company, Rwanda was partnering with Mota Engil with the former the majority shareholder at 75 per cent.

To pave way for the latest deal, Rwanda early this year bought back all the 75 per cent stake from the Portuguese firm, before ceding the 60 per cent to Qatar Airlines.

The third agreement about guarantee for indemnity. Government of Rwanda’s shares are owned through Aviation Travel and Logistics Holdings and it was necessary to have an indemnity agreement to establish that ATL represents and is guaranteed by the Government. It means that the Government guarantees any liabilities on the part of ATL, if any.

2. Newly envisaged capacity

The partners are in the process of redesigning an upgrade to the facility to meet international first-class standards.

Gatete said this came with bolder ambitions in terms of the size and capacity of the proposed airport.

The new plan envisages capacity of seven million passengers annually by 2022 and 14 million passengers in later years. 

The idea is to turn the proposed airport into a regional hub, Gatete said.

3. How much will the revised project cost?

The increased capacity and new design have driven up the projected cost of the facility to about $1.3 billion for the two phases.

Gatete said parties were still working on the details but initial estimates have suggested some $1.3 billion. The overall estimate for the previous project was around $825 million.

4. Timeline

The new airport is being redesigned to accommodate seven million passengers per year, and will be completed by 2022.

Passenger capacity is set to increase in subsequent phases of the airport expansion.

5. Who is the new contractor?

According to the minister, Mota Engel will remain as the contractor. The firm remains a technical partner in the project, and it is expected to adjust the works accordingly.  

6. How did the deal come about?

It remains unclear which party approached the other first as Gatete was non-committal on this, only saying that this is part of the broader bilateral cooperation framework between Rwanda and Qatar. Ties between the two countries cover logistics and transport, among other areas.

 7. Impact on economy

The project is expected to impact on the country’s economic growth.

Among other impacts it’s likely to have, experts say, include increased use of local materials, job creation and opportunities for other sectors. On completion, the airport is expected to become the single largest employer in the country.

The proposed facility will also boost the Made-in-Rwanda drive as more locally made products will find their way in duty-free shops, which is expected to have a trickledown effect on multiple sectors of the economy.  

8. Lessons from the initial project

Gatete admitted government drew lessons from working on the initial project which will come in handy under the new arrangement.

We now have a better understanding of international airport ecosystem, he said, adding that this was a factor in deciding on a new partner (with a great deal of experience in the field).

9. How does the national carrier, RwandAir, benefit from this? 

The proposed airport is expected to support the national carrier’s expansion plans in the coming years.

At the moment, the Infrastructure minister said, RwandAir serves 28 destinations and is set to open new routes to the US, Angola, Mozambique and Ethiopia.

Gatete said that plans to further grow RwandAir’s fleet are in advanced stages, noting that the national carrier awaits delivery of new wide-body aircraft although he remained coy on exact delivery timelines.

But he said the proposed airport in Bugesera District will also allow for more airlines to start operations in Rwanda especially as the country continues to sign bilateral air service agreements with other nations.

To date, Rwanda has over 110 such agreements with countries around the world.

10.  How strong are Qatar, Rwanda relations?

Rwanda and Qatar have bolstered bilateral ties across different sectors in recent years. Just last month, Qatar waived visa requirements for Rwandans intending to visit the Gulf nation.

In February this year, Rwanda’s Parliament approved a bilateral investment treaty the two countries signed last year. 

When the Emir of Qatar visited Rwanda in April 2019, the two countries signed four bilateral agreements covering culture, sports, tourism and business events.

President Kagame has paid visits to Qatar and both sides have been working to strengthen ties in various areas, including diplomatic cooperation, aviation, politics, agriculture, technology, mining, transport and tourism.

 

cmwai@newtimesrwanda.com

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