The two parties signed the agreement last evening at the Ministry of Finance and Economic Affairs.
The agreement was signed between the recently formed Aviation Travel and Logistics Holdings Limited (ATL) -on behalf of the government- and Manuel Mota, the Chief Executive of the firm.
The pact will see Mota Engil Africa finance and construct the airport with a completion date of December 2018 and later run the facility’s operations for the next 25 years with option to extend by 15 years.
This means that the government will not incur costs to put up the facility while their new partner will recoup their investment by running operations.
Mota said that the first phase which is expected to deliver a facility of international standards with a capacity of about 1.7 M passengers per year will incur an investment of USD 418M.
Upon completion of the first phase in December 2018, Mota said that they will commence further expansion which will increase the airport’s capacity to 4.5 million passengers per year, costing and additional USD 400M bringing the total cost to USD 818M.
Aware of the tight deadline to complete the facility of about 28 months, Mota termed it as a ‘fast-track project.’
“The ground breaking will be in June next years as it awaits securing finance but before that we will be having starting some preparatory works in partnership with the government,” Mota said.
The Minister for Infrastructure James Musoni empasised the urgency for the new, modern and large facility that can accommodate the growing air traffic as Rwanda was developing into a conference and business hub.
“More than ever, we need an airport that can match the growth,” Musoni said.
He expressed confidence in the firm saying they had performed well in a project to expand the Kigali International Airport.
He allayed fears that the airport project was could experience delay completion as was experienced during the construction of the Kigali Convention Centre saying that offered lessons to the government on the undertaking of large projects.
The Minister for Finance and Economic Planning, Claver Gatete said that the preference of the Public Private Partnership model as opposed to borrowing was to speed up the development and to increase its profitability.
“Usually the government has been investing heavily from the money from taxes, loans and grants. But then we have reached a level we need to develop faster. Whenever we do business in joint venture together with the private sector, we can achieve much more with less. That is how we can grow faster. For the projects that are more income generating and are profitable, we always want to give a chance to the private sector,” Gatete said.
He said that by working closely with the private sector, the government gives comfort to the investors on the viability of the project.
He confirmed that much of the expropriation of people living in the area set aside for the airport had been done and the few remaining people were in the process of being compensated.
The government confirmed that the process was substantially complete with about 10 households who had trouble with their documentation still pending.
13 people among the group compensated were said to have incomplete bank accounts causing their payments to bounce back to the government accounts however, their money had been moved to the district accounts awaiting the readiness of their accounts.
The investment which was termed by the Rwanda Development Board Chief Executive Francis Gatare as a vote of confidence in the economy and the development of the country is largely expected to boost the growth of 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 country was slowing down saying that it was just a temporary headwind largely brought about by the economic situations.
“The industry across the continent might be going through headwinds which are just temporary induce by the general economic situation in Africa, but all in all airlines in African are set to growing given that the continent is the next frontier when it comes to 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 growth by diversifying the market is serves and exploiting underserved areas in Africa.
Today, RwandAir will make its inaugural flight to Benin as part of the diversification 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.
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