The construction of a new international airport in Bugesera District, approx. 25km from the capital Kigali, will significantly contribute toward efforts to make Rwanda a major conference and logistics hub, officials have said.
Construction works for the planned Bugesera International Airport are scheduled to start in June next year, following Thursday’s signing in Kigali 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 development came at a time the country has been making heavy investments to position itself as a conference, logistics and business hub in the region.
Among the key steps taken towards achieving this ambition include investing or encouraging investments in world-class hospitality services, which has increasingly seen global hotel chains establish a presence in the country.
And with the country having just one international airport at the moment– the Kigali International Airport with capacity to receive more than 1.5 million arrivals a year– the government has been busy looking into ways of adding another major airport.
Speaking at the signing, the Minister for Infrastructure James Musoni, underlined the urgency of 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.
The new airport project comes at time when a section of analysts have predicted doom for the aviation industry across the continent given the generally poor performance of major African airlines owing to economic difficulties.
However, officials are upbeat about the Bugesera project along with an ambitious expansion plan by RwandAir, the national carrier, which seeks to further widen its presence across the continent and to open overseas routes, including China.
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.
“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.
All in all the future is bright in Africa for airlines and we are looking at tapping into that growth, he said.
The deal will see Mota-Engil finance the construction of the proposed airport with completition of the first phase set for December 2018 and subsequently run the facility’s operations for 25 years with an option of extending by another 15 years.
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, they will commence expansion works which will increase the airport’s capacity to 4.5 million passengers per year at a cost of 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 government expressed confidence in the firm’s capacity, noting they had performed well in a project to expand the Kigali International Airport, the country’s only international airport at the moment.
Minister Musoni dismissed concerns 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 for 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.