Professional Documents
Culture Documents
Pre-feasibility Study
for New Terminal Development Project
at Jomo Kenyatta International Airport
in the Republic of Kenya
Final Report
February 2017
This Study Report was prepared by JGC Corporation in response to a request by the Ministry of
Economy, Trade and Industry (METI) for Pre-feasibility Study for New Terminal Development
Project in Jomo Kenyatta International Airport (hereinafter, JKIA) in the Republic of Kenya as a
study on Economic Partnership Projects in Developing Countries in FY2016.
The re-based Gross Domestic Product (GDP) of the Republic of Kenya (hereinafter, Kenya) figures
of USD 58.1 Billion in 2014 elevated Kenya to a Lower Middle Income Country, one of the largest
economies in Sub-Saharan Africa and amongst the fastest growing in the world. Additionally,
Kenya is located in the center of East Africa, and is expected the more economic growth as the
economic, commercial and logistical hub in East and Central Africa.
JKIA is a sole international airport at the capital city of Kenya as well as the gateway to East and
Central Africa. The number of passenger using JKIA decreased in 2008 and 2013 following
respective elections, however in later years it was increased smoothly, with the number of annual
international passengers reaching 3.9 million, domestic passengers 1.4 million and cargo volume 240
thousand tons in 2015.
Kenya aims at being a middle income providing high quality life for all citizens by the year 2030
Dec. in “Kenya Vision 2030", launched July, 2008. The modernization and expansion of JKIA is
considered as one of the most important projects that are central to economic development of Kenya.
Under the above circumstances, the Study Team conducted a Pre-feasibility study for the Project in
an effort to build world class airport, addressing technical, financial, economic, social and
environmental aspects.
The Study Team sincerely hopes that this report will be of help in realizing the Project and be useful
as well for the concerned parties of both countries.
February, 2017
JGC CORPORATION
MAP
Pre-feasibility Study for New Terminal Development Project in JKIA in the Republic of Kenya
Table of Contents
Chapter 0 Summary
4.4 Requests Related to Environmental and Social Considerations from the Implementing
Agency to the Japan Side .................................................................................................4-7
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
- ii -
Summary
Table of Contents
Chapter 0 Summary
Kenya is the hub of economy, commerce and logistics in East and Central Africa, and Kenya can be
an excellent destination for investment. Foreign Direct Investment (FDI) in Kenya has increased,
and Kenyan Gross Domestic Product (GDP) occupies the 40% of GDP in the East Africa region.
Therefore, Kenya is likely to be the most hopeful economic country in the East African region.
In late years, the Kenyan GDP shows around 5% of steady growth. According to the Kenya
National Bureau of Statistics (KNBS) report, Kenya is categorized in the Lower Middle Income
Country by the World Bank (WB) with 5.6% of GDP annual average growth rate and 1,340 USD of
Gross National Income (GNI) per capita.
Kenya has a country area of approximately 1.5 times in Japan, and the air transportation takes an
important role for the movement of people.
Kenya has around 55 airports totally, and most of the airport facilities are managed and operated by
the Kenya Airports Authority (KAA) and the air traffic control services are provided by the Kenya
Civil Aviation Authority (KCAA), that are affiliated with the Kenya Ministry of Transport,
Infrastructure, Housing and Urban Development (MOTI&HUD).
Figure 0-1 Location of Main Airports in Figure 0-2 International Flight Network of JKIA
Kenya
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Jomo Kenyatta International Airport (JKIA) is the sole international airport in Capital Nairobi with
6.8 million passengers in 2015. The air passenger volume in Kenya has been increased steadily
with an annual average growth rate of 3.7%, and the around 75% of Kenyan whole air passenger
volume is occupied by JKIA, that shows JKIA is the right hub airport for international and domestic
flights in Kenya.
10,000,000
Transit
9,000,000
Domestic
8,000,000
International
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
2010 2011 2012 2013 2014 2015
Source: KAA
The city of Nairobi is characterized by undulating hilly topography with an elevation in a range of
1,460 m to 1,920 m. Nairobi is the largest city in Kenya, and also one of the most important
economic centres in East and Central African Regions. The Nairobi city accounts for 50 % of
formal employment in Kenya and generates over 50 % of the GDP.
JKIA is the capital airport located at about 13km south from the centre of Nairobi, the outline is
shown below.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
The survey is carried out by the Survey Team based on the discussion with Kenyan Government and
each related authorities to establish a plan for the New Passenger Terminal Development Project
(hereinafter the Project) at JKIA. In addition, the Project is intended to be formed as a candidate of
yen-loan (ODA) agreement to introduce Japanese advanced technologies in it with “an Eco-airport”
concept. Survey area is at the JKIA site.
The survey was carried out from September 13, 2016 to February 28, 2017. The draft final report
was submitted at the end of January, 2017, and the final report is planned to be submitted at the end
of February, 2017.
As an airport master plan, the Kenya National Airports System Plan (2011 M/P) was prepared by the
Louis Berger Group (LBG) in 2011, which covers the systems for Kenyan all airports and the details
for 10 major Kenyan airports including JKIA. The plan was intended to revise every 5 years, but it
was not revised in 2016.
After 2011, Kenyan civil aviation sector has been affected by politic, economic and social changes
with presidential elections, the outbreak of terrorism and so on in Kenya. Especially, at JKIA, with
the disappearance of the arrival lounge by the fire of August, 2013 at JKIA, the following
rehabilitation projects were planned.
• Rehabilitation of the Existing R/W, T/W and Apron (Parallel Taxiway Expansion)
• Rehabilitation of the Existing PTB (T1)
• Construction of the 2nd Runway
• Construction of the New Passenger Terminal Building (PTB)
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Source: KAA
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
2011 M/P was planned to complete in 2030. The target year of the Project is 2035 considering
5 years has been passed since 2011 M/P conducted.
The air traffic demand is estimated with a forecasting model, which is developed by analyzing
the correlation between indicators of economy and air traffic demand. Among many
indicators, GDP is judged as eligible to be an independent variable for all of forecasting models.
As an economic indicator, the GDP provided by the International Monetary Fund (IMF) was
applied to the air traffic demand forecast in this survey.
Based on the result of the passenger demand forecast, the annual passenger volume of JKIA
will be 19.3 million in 2035.
On the other hand, the annual passenger capacity of the existing PTB of JKIA is 7.5 million
(T1:5.0 million + T2:2.5 million) as of in 2017. According to KAA, the annual passenger
capacity of T1 will be increased to 8.0 million (+3.0 million) when the rehabilitation is
completed. And the existing terminal (T2) was built in 2015 in design life of ten years and
cannot anticipate the service after 2025.
Therefore, the new PTB should be designed and constructed with the annual passenger capacity
of 11.5 million (19.3 - 8.0).
In the new PTB construction, it is necessary to aim at the materialization of the “Eco-Airport" with
the latest energy-saving measures which are based on the week electric supply circumstances in
Kenya. Furthermore, the acquisition of the Silver Standard of LEED (Leadership in Energy &
Environmental Design) which is US environmental evaluation technique is declared in the JKIA
master plan.
In August 2003, the Japanese Ministry of Land, Infrastructure, Transport and Tourism (MLIT)
established the “Eco-Airport Guidelines (1st edition)” to provide a basic structure for energy
conservation, recycling, and other environmentally-conscious endeavors in airports to mitigate
environmental impacts caused by the airport operations.
A lot of measures taken up from the above-mentioned guidelines could be applied to JKIA in order
to materialize the “Eco-Airport”.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
The outline of the Project is as follows. Based on the air traffic demand forecast, the new PTB is
recommended to be complete the construction in 2023 and commerce the operation in 2024.
26
2017 2023 2035
24
Terminal Passenger (Million Persons)
14
12
10
10.6 Mill.
8
6
4
2
0
2005 2010 2015 2020 2025 2030 2035 2040
Year
Source: Study Team
0-6
Figure 0-7 JKIA Layout Plan of Future Development Plan
Planed Location
Scope offor New
this PTB
Study
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Source: KAA
Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
KAA have already conducted the environmental and social assessment (ESIA) for the
new PTB development, and the environmental license has been issued by the National
Environment Management Authority (NEMA). The license was issued in August 2014,
and expired in August 2016.
According to the interview with NEMA, re-licensing process and payment of the licensing fee
are not required. Only simple procedure to update the contents of the EIA report and payment
of the renewal fee are required for renewal of the license because of the following reasons:
• The new PTB development project will be conducted in the airport area.
• The environmental license was obtained and the licensing fee was paid once.
In the Environmental (Impact, Audit and Strategic Assessment) Regulations enacted in 2009,
strategic environmental assessment (SEA) was newly stipulated. In the JKIA Master Plan in
the 2011M/P, SEA was conducted and summarized in Chapter 9. Even though the above
regulation of 2009 was already developed at that time, SEA rules had not been operated yet and
permission for the SEA of JKIA was not granted by NEMA. Therefore, KAA has acquired
environmental licenses for individual development projects at JKIA. However, it became
difficult for NEMA to review the overall development plan of JKIA, since individual
development projects are all located in the airport area and several contents to be considered in
each EIA are overlapping.
Hence, NEMA has requested KAA to conduct SEA for the overall development project of JKIA
first to acquire the permission, then to reacquire the environmental licenses for individual
projects. Prior to renewal of the environmental license for the GFT development project, KAA
needs to review and consider SEA for the overall development project of JKIA and conduct
supplemental survey to acquire permission of SEA by NEMA.
In case of utilizing financial supports by the Japan International Corporation Agency (JICA) for
the Project, it is required that the EIA report and relevant documents meet the requirements of
the JICA Guidelines for Environmental and Social Considerations.
It was already confirmed in this study by the checklist in the JICA Guidelines that there were no
major issues on environmental and social considerations of the proposed project. However
further studies should be made in terms of noise and the mitigation measures.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Premise and hypothetical conditions for the financial and economic analysis of the new
PTB are as follows.
• Conduct construction cost estimate for the new PTB with maximum 11.5 million passengers /
year.
• Conduct estimation for aeronautical and non-aeronautical revenues and associated Operating
Expense (OPEX) to operate the new PTB thought the 30 years operation period. (2024~2053),
and generate cash flow model.
• Conduct a financial evaluation with using Internal Rate of Return (IRR) to assess the financial
feasibility and sensitivity analysis in order to assess the upside and downside scenario.
• Conduct financial evaluation under the PPP scheme in consideration of the direction of the
Government of Kenya to reduce external debt and also qualitative analysis to assess and
identify key issues regarding the PPP scheme
Labor cost, operation and maintenance cost, electricity cost, administration cost, interest,
depreciation and corporate tax are assumed to be incurred during the operation period.
The existing PTB is assumed to be operated by KAA after the completion of the new PTB. In
other words, the third party (concessionaire) will operate only the new PTB in case of the
airport privatization in PPP scheme.
The maximum capacity of the existing PTB is estimated 10.5 million/year until 2024, and it
would reduce to 8.0 million/year after 2025 due to the closure of the T2, so the new PTB is
supposed to absorb the surplus passenger of the existing PTB.
(4) Revenue
As aeronautical revenues, the parking charge, the passenger service charge, the air bridge fee
and the fuel concession of JKIA are anticipated on the basis of the rules of KAA.
Based on the JKIA budget, the non-aeronautical revenues will be account for 36% of the
aeronautical revenues (excluding landing charge). The detailed contents of the expected
non-aeronautical revenues are the tenant fee, the catering service charge, the ground handling
charge, the advertisement fee and the car parking charge.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Calculation period of the cash flow model is 1) construction period from 2020 to 2023 and 2)
operation period from 2024 to 2053 (30 years)
Following assumptions are used for the financial and economic assessment. The funding
scheme is based on the Japanese ODA loan (STEP). Assumptions shown in Table below are
used for the loan calculation.
IRR calculation is conducted with incorporating with assumptions set out in Table above. As
a result, the IRR for the project is 6.0% which exceeds the interest rate substantially; therefore
the financial feasibility is confirmed for the implementation of the Project.
(2) Case 2: Construction project by ODA (STEP) + PPP (Concession to the private sector
for the terminal operation)
The new PTB is constructed with financed by the Japanese ODA loan (STEP), and privatized
by the PPP scheme for operation.
Construction, the operation of the new PTB is the case which a private company carries out
together. It becomes the BOT (Build, Operation and Transfer) contract by the PPP scheme
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Concession Fee
Fixed fee CAPEX×10% N/A
(1 time on commencement
of operation)
Variable fee Revenue×10% Revenue×10%
Result
Project IRR 4.4 % 4.4 %
Equity IRR 17.9% 4.7%
NPV (MM USD) -8 -336
Accumulated Concession
627 557
Fee(MM USD)
Based on the result above, it is revealed that the case-3 is not commercially feasible, since the IRR is
far below both equity cost and Weighted Average Cost of Capital (WACC). Therefore, private firms
are not able to make an investment decision under this scenario.
On the other hand, the IRR of the case-2 is lower than ODA (STEP) case, however, IRR for the
equity shareholder is not far from the cost of equity and the KAA revenue through concession fee is
expected to reach certain amount for justifying this case. Therefore, this case could be feasible for
both of private and public sectors, since both parties will be able to enjoy certain benefit thought the
project. However, the detailed terms and condition should be carefully considered and studied
further in the next step.
The following matrix summarizes the features and the pro-cons for the considered three versions.
KAA KAA
Case2: ODA Foncession
After construction by ○ Low interest loan
ODA(STEP) ODA Bid Bid
ODA, operator is ○Utilizing private know-how
+Concession Construction Operation
selected by concession △Demarcation between existing and new PTBs
bid and undertake
KAA SPF operation
Case3: PrivaPe・AfDB Private investment ○Private know-how (World-class operator)
Private(PPP/ PPP Bid AfDB loan:6% △Private Company’s intention for participation
BOT) Construction Operation
(Feasible or Not)
△Demarcation between existing and new PTBs
SPF SPF
The focus of this report is to investigate the feasibility of the new PTB and assess both technical and
financial aspects. However, the demarcation (split of role) between existing PTB and the new PTB
would be one of the most critical issues for successful development of JKIA.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Four major projects for rehabilitation and newly construction are now carried out at JKIA as showed
in the figure below.
Figure 0-8 Major On-going Projects at JKIA
In this report, the new PTB is described to be built in the location shown in the above figure, where
is based on the 2011 M/P. However the other location where is in the southeast direction of the
existing PTB for the new PTB (near the 2nd runway) is also recommendable with some advantages.
Such a relocation of one facility causes the other facilities to be moved. In other words it becomes
the billiards state. In order to avoid such a situation, the Airport Layout (Plot Plan) considering
expansion space has to be prepared carefully in the Airport Master Plan through the discussion with
the relevant parties.
0.6.2 Necessity of Detailed Master Plan (Revision of the Airport Master Plan)
The major 4 projects in JKAI are now carried out on the basis of the 2011 M/P issued in 2011.
Because the circumstances surrounding JKIA including the passenger volume decrease by the
terrorism outbreak in 2013 have changed after then in Kenya, the immediate revision of the Airport
Master Plan is required. For example, the air traffic demand forecasted curve described in the
Chapter 3 (forecasted in 2015) is changed in comparison with the demand forecasted curve in the
2011 M/P (forecasted in 2011) about five years late.
Several hierarchies can be thought about by an airport range to intend for the Airport Master Plan
shown in the figure below. The low-end Airport Master Plan is made for only one airport, which
composes it of (1) Current situation survey, (2) Demand forecast, (3) Facility requirements, (4)
Development plan (including airport layout), (5) Cost estimation and (6) Economic analysis.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
The reinforcement of the passenger capacity of JKIA is a very urgent issue. In this report, the early
revision of the Airport Master Plan for JKIA (JKIA Detailed Master Plan) is strongly requested, that
makes the mutual relations of major 4 on-going projects at JKIA clear and keeps them harmonized
with the unified ide and vision for the future of JKIA.
(1) Proposed scheme for finance and operation for the new PTB
The following finance and operation schemes for the new PTB construction project become the
preconditions for preparing for the project implementation schedule in this report. (refer to
Phase 1 in the Figure below)
1) Construction of the new PTB is done by Japanese ODA (STEP) as its finance source.
2) Operation and maintenance for the new PTB are done by the third party (Concessionaire).
It is expected to increase the airport value by utilizing the world-class airport operator as
well as to obtain the latest know-how in the airport operation and maintenance.
3) Based on the JKIA Detailed Master Plan, the new PTB is well harmonized with the other
projects carried out at JKIA.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Figure 0-10 Proposed scheme for finance and operation for the new PTB
In the privatization of the airport by the PPP scheme above mentioned, an example of airport
privatization in Japan serves as your good reference.
On the other hand, the Japanese Government promotes airports in Japan to materialize the
higher “Eco-Airport”. The expectation to the “Eco-Airport” is also very high in Kenya
especially it is aggressive to introduce the energy-saving technology considering the power
supply circumstances in Kenya. Therefore, the pursuit of the “Eco-Airport” based on the
cooperation of Kenya and Japan could expect the possibility of introducing the Japanese latest
eco-technologies into Kenya and combination research and development, ant it may be said that
there is the merit for two countries.
The current annual passenger capacity of JKIA is 7.5 million. The details are as follow.
T2 that was built as the design life of 10 years in 2015 finishes the position quota in 2025.
Then, the passenger capacity of 2.5 million/year is decreased at JKIA.
Therefore, the annual passenger capacity of the existing PTB at JKIA has to be considered as
10.5 million (T1:8.0 + T2:2.5 million) by 2025, and only 8.0 million (T1:8.0 million) after 2025,
with adding 3.0 million increase to T1 by the rehabilitation.
According to the demand forecast described in the Chapter 3, the annual passenger volume
becomes approximately 10.5 million in 2023 that is equal to the total capacity of JKIA then.
Therefore, it is necessary to complete the construction and commerce the operation of the new
PTB at JKIA in 2023. KAA is requested to start both projects of T1 rehabilitation and the new
PTB construction in parallel as soon as possible in order to prevent the passenger capacity
excess at JKIA.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
In terms of the passenger capacity for the new PTB, it is planned based on 8.0 million of the
passenger capacity of the existing PTB after 2025 as a precondition. As mentioned in detail in
the Chapter 3, the new PTB should be available for the passenger demand until 2035.
Therefore, it is recommended to plan the new PTB at JKIA with the annual passenger capacity
of 11.5 million as phase 1 of the development. As a result, total annual passenger capacity
becomes 19.5 million (T1:8.0 + new PTB:11.5).
Fig. 0-11 Time limitation of each Project at JKIA based on the PAX demand forecast
For the construction financed by the Japanese ODA (STEP), it is planned to take 3 years for the
construction, 1 year for the detailed design and 1 year for the preparatory study (basic design)
and 6 months for each consultants and contractor selections. As a result, this project has to be
started (consultant selection for the preparatory study) in the middle of this year (2017) at the
latest.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
On the other hand, for the operation of the new PTB by the third party (concessionaire), it must
be made based on the procedure determined in the Kenyan PPP law. The necessary work
activities such as preparatory study (PPP Feasibility Study) for basic design and PPP scheming,
preparation for concessionaire selection are referred to the Japanese procedure for the airport
privatization.
As for the passenger volume using JKIA, it is expected to be exceeded its passenger capacity in very
this year (2017), and expansion of passenger capacity of JKIA by the rehabilitation of the existing
PTB (T1) as well as by the construction of the new PTB are very urgent issues.
As described in the Chapter 5, the new PTB is recommended to be constructed by utilizing Japanese
ODA (STEP) finance, and operated by the third party (concessionaire) under the PPP scheme.
Reproduction
Prohibited
0-16
Chapter 1
Kenya is the economic, commercial, and logistics hub in East and Central Africa, and is an
excellent destination for investment. The foreign direct investment (FDI) in Kenya has increased
over time, and the Kenyan gross domestic product (GDP) is 40% of the GDP in the East African
region. Therefore, Kenya is likely to be the most hopeful economic country in the East African
region.
In addition, compared with other countries, Kenya is the most diversified economic country
which does not export oils and gases.
Furthermore, development of modern railways, ports, airports, and geothermal plants have
accelerated the growth of the Kenyan economy. It also makes Kenya economically stable since the
country is a member of the Common Market for Eastern and Southern Africa (COMESA) and East
African Community (EAC) which include about a third the African population with about 400
million people.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
According to the data in 2015, the biggest share in the Kenyan GDP is from agriculture,
which has at 30% of the total GDP. High quality cut flowers are the main export items. The second
biggest share is from manufacturing and at 10% of the total GDP. The service sector including
transport and storage, which has the third biggest share (around 8% of the total GDP amount), at
50% of the total GDP. While agriculture has grown from 23% of the total share in 2006,
manufacturing has declined from 14% of the total share in 2006.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
(1) Overview
Q The fiscal plan in 2015/16 entailed a deliberate effort to continue exercising prudence in public
expenditure management with the principal goal of containing fiscal risks, gradually lower the
fiscal deficit, and contain growth of recurrent expenditures in favour of productive capital
spending.
Q The government endeavoured to accelerate spending in infrastructure, agriculture, security,
health, education, social protection, and youth empowerment. The overall objective of this will
be to realize sustainable, shared, and equitable growth that would in return lead to job creation.
Q The national government budget estimates for 2015/16 amount to KES 2,224.0 billion, an
increase from KES 1,950.7 billion spent in 2014/15. Total recurrent expenditure is estimated at
KES 1,238.2 billon, while development expenditure is expected to grow by 22.8% to KES
985.8 billion. On the other hand, the total recurrent revenue in 2015/16 is estimated to register a
26.6% growth to stand at KES 1,401.2 billion, out of which, tax revenue will account for
92.0%.
Q Total stock of debt as of the end of 2014/15 stood at KES 2,601.4 billion, of which, external
debt stock accounted for 54.7%.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
The location of the main airports in Kenya and the international flight network of JKIA are
shown in Figure 1-2 and Figure 1-3, respectively. Most of the international flights in Kenya are
concentrated in JKIA and they consist of flights for the main African countries (mainly East African
countries), Middle East, Europe, and Asia.
Figure 1-2 Location of Main Airports Figure 1-3 International Flight Network of JKIA
in Kenya
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
200,000
150,000
100,000
50,000
-
2010 2011 2012 2013 2014 2015
Source: KAA
300,000,000 International
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
-
2010 2011 2012 2013 2014 2015
Source: KAA
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
1.2.3 Public Organizations and Airlines within the Aviation Sector in Kenya
(1) Public Organizations
The organizations that are in-charge of the aviation sector are the Kenya Airports Authority
(KAA), the Kenya Civil Aviation Authority (KCAA), and the East African School of Aviation
(EASA), as shown in Figure 1-7. EASA is a semi-authorization division of KCAA. All these three
organizations are under the Ministry of Transport, Infrastructure, Housing and Urban Development
(MOTI & HUD). The Technological Department is a major stakeholder.
Department for Transport Kenya Railways Corporation (KRC (Amendment) Act, 2005)
• Formed : 1954.
• Location : JKIA
• EASA is an ICAO Regional Training Centre of Excellence
(RTCE), an ICAO TrainairPLUS full member, an ICAO
Aviation Security training centre (ASTC).
• Number of Staff :
(2) Airlines
Several airline companies operate in the country. Some of which are shown in Table 1-5.
Kenya Airways is the largest airline in Kenya. It belongs to Sky Team, one of three alliances to
which airline belong.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Nairobi is the capital and largest city of Kenya and also one of the most important economic
centers in East Africa. Nairobi City accounts for 50% of the formal employment in Kenya and
generates over 50% of GDP. The city plays an important role not only as a political center but also as
a model for economic and social development.
Urbanization within the outer area of Nairobi City had rapidly expanded in recent years.
Greater Nairobi is planned as part of the Nairobi Metropolitan in the Nairobi Integrated Urban
Master Plan.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
JKIA
Source: The Project on Integrated Urban Development Master Plan for the City of Nairobi in the Republic of Kenya
(JICA, 2014)
The average population density excluding Nairobi National Park is 5,429 per km2. The
Central Division and Kamukunji Division have a much higher density than others. In Greater
Nairobi, Nairobi City had grown faster in the period from 1989 to 1999 when the city grew at 4.9%
and the environs outside the city at 3.0%. But from 1999 to 2009, the environs grew faster as it grew
at 4.1% and the city at 3.9%. The change seems to be a sign of urban expansion of Nairobi City. In
the city, Embakasi Division has the highest growth, while out of the city in Greater Nairobi, Ruiru
area to the north of the city and Mavoko and Kitengela areas to the south are the fastest growing.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
In “The Project on Integrated Urban Development Master Plan for the City of Nairobi in the
Republic of Kenya (2014)” done by JICA, the following issues on business aspects and directions
for their improvement are described:
Table 1-6 General Issues and Directions for Improvement of Industries in Nairobi City
General Issues Directions for Improvement
(i) Industrial structure
Lack of competitive Skill levels vary a lot. The informal light Nairobi needs a larger number of highly
skills manufacturing (Jua Kali) is yet to improve skilled and specialized small enterprises.
their product quality, therefore they cannot Improve the skills mainly through business
maintain the market share. linkages and by responding to market
needs.
High cost structure Extra costs are incurred due to costly Improve efficiency of the economic system
power, traffic congestion, and insecurity in including efficiency of labour,
addition to not-so-low labour costs. infrastructure, and utilities.
Lack of linkages Due to mismatch of quality, costs, etc, Deepen inter-business linkages as well as
inter-business linkages are weak. Line linkages with major buyers such as
agencies and the NCC should directly or government organizations and
indirectly support businesses of various supermarkets.
sizes.
Weak competitiveness Freer importation including in-flow of Overall efforts to strengthen
counterfeits is dominating the market and competitiveness and to find areas with
destroying local businesses. relative advantages, so that protectionism is
not necessary.
(ii) Basic and socio-economic conditions
Lack of available land Given the current land use and Efficient land use at select locations and
transportation conditions, the land in relocation of space-intensive functions to
Nairobi appears to be mostly saturated, the environs. Open up new spaces for
although a lot of spaces are underutilized. various business activities by such means as
vertical mixed use.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
As mentioned in the above, Nairobi City has economically and demographically grown
rapidly in recent years. Therefore, the growth of aviation demand and increasing of further business
opportunities related with air transport can be expected in Nairobi. Especially, air traffic is the main
transport mode for tourism. Kenya has a high potential for tourism, and tourism movements in
Kenya is made based in Nairobi City. Therefore, the importance of the aviation sector in Nairobi will
be higher and higher.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Termianl 1 Termimal 2
The ratio of flights to and from JKIA by destination is shown in Figure 1-11. Most of the
international flights in JKIA are to African countries. The ratio of international flights for Europe and
Middle East is second to that for African destinations. The flights for Asia are fewer and currently
there are no flights to North and South America. In addition, the number of cargo flights are low.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Figure 1-11 Ratio of Flights and seats to and from JKIA by Destination
Domestic Movement Total Movement International Movement
by Destination by Destination
The ratio of flights to and from JKIA by airlines is shown Figure 1-12. Over half of the
international flights in JKIA are by Kenya Airways; introduction of foreign airlines has not been
conducted successfully.
Figure 1-12 Ratio of Flights and Seats to and from JKIA by Airline
Domestic Movement
by Passenger Airline by Passenger Airline
Qatar
Airways
Emirates Others
3%
3% 19%
RwandAir Kenya
4% Airways
Precision 59%
Air Ethiopian
7% Airlines
5%
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Photo 1-1 Overview of Wilson Airport Photo 1-2 Aircraft Parking Apron
1-16
Chapter 2
Survey Method
Table of Contents
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
From the findings above, to examine a business scheme and evaluate a business feasibility
through economic and financial analysis.
(7) Environmental and social considerations
To establish a study for environmental and social considerations based on relevant Kenyan laws
and regulations.
(8) Project promotion
To discuss with Kenyan Government, related authorities and companies regarding proposed
airport development project plan in JKIA, based upon the outcome of the master plan review
and the feasibility study.
(9) Final report preparation
To make and submit a Draft Final Report and a Final Report to Kenyan Government and related
authorities.
Fig. 2-2 Contents of the Survey
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
data covered such areas as airport civil engineering, architectural design, air traffic demand
forecast, economic and financial analysis, construction planning and cost estimation.
(3) The second home work (31 Oct. 2016 – 13 Jan. 2017)
Based on the collected documents and data, air traffic demand forecast, conceptual design and
cost estimation of the new PTB and economic and financial analysis were carried out.
(4) The second field work (16 Jan. 2017 – 24 Jan. 2017)
Prepare, present and discuss results of the second home work on air traffic demand forecast,
conceptual design and economic and financial analysis.
(5) The third home work (23 Jan. 2017 – 28 Feb. 2017)
Prepare, present and issue a Final report of the survey to Kenyan authorities.
2-4
Chapter 3
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
The addendum of the Jomo Kenyatta International Airport (JKIA) was studied in 2011 to
consider the development plan of Kenya airports.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Source: AIP
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
(2) Taxiway
There are three different types of taxiway, i.e.: parallel taxiway which is connected to the
runway, four connect taxiways which link the runway, and aircraft parking apron. The pavement
strength (most of the aircrafts land at Runway 06 and take off at Runway 24) is PCN65/F/A/W/T.
These taxiways serve the apron for the existing terminal buildings and the freight buildings.
The center of the existing parking apron has a width of 22.5 m suited for B747 and two
narrow connection taxiways (10 m wide) for small aircrafts. The parallel taxiway length is around
3,000 m, although the runway length is more than 4,000 m. Therefore, there is a program that the
runway occupancy time becomes longer when a larger aircraft is landing. The 2011 M/P suggested
that it is necessary to expand the parallel taxiway length to as long as the runway and construct rapid
exit taxiway to reduce occupancy time.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Source: AIP
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
The total number of aircraft parking spots is 68. According to the KAA staff interview
survey, there is shortage of aircraft parking apron spots due to the long stay and night stay of
aircrafts, and at least 40 aircrafts occupy the aircraft spots at night. Therefore, KAA is letting two
aircrafts park on a spot position or park in an open space not specified as an aircraft parking spot.
GFS personnel have transferred ~
Photo 3-2 Parking at Not Specified Area Photo 3-3 Two Aircrafts Parking at a Spot
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Cargo Area
T1
T1B T1C
T1A T1D
T1E
Chapter 3 Multi-
T2
storey
KAA Utility Center
parking
The KAA is in the process of renovating T1B,C & D to expand the floor area to 70,000 m2
and increase the handling capacity to about 8 million passengers (additional 3 million passengers)
with 14 permanent gates until 2017.
Airline companies assigned to each terminal block are shown in Table 3-4.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
3.1.5 Utilities
(1) Electricity
The existing substation facilities are situated within the utility center on the southwest side
of the terminals.
Electricity is supplied to the JKIA by Kenya Power and Lighting Company (KPLC) via two
66,000 V cables and is reduced to 1,100V at 14 substations. The present power consumption is 7.5
MW.
A non-utility generator system has two 2 MVA diesel generators installed in 2014, and one
each of 1 MVA and 1.4 MVA generators installed in 1970. Power outages occur frequently at a rate
of two to three times a week, and each lasting about three hours.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Cargo Terminal
Passenger
Terminal 1A~D
Passenger Terminal
1E
(JKIA Staff Parking)
Temporary
Parking
The vehicle parking at T1 was located at curved arrival building before the fire incident in
2013. The multi-storey car park was used as temporary passenger terminal after the fire and KAA
built temporary and late permanent offices at the rooftop which is still closed for parking. In the near
future, KAA is in the process of restarting the multi-storey car park to solve the shortage of car
parking space. The total capacity of the multi-storey car park will be 1,100 due to the roof space
being taken up for office spaces.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
The temporary car park will be demolished to provide access road for the green field
passenger terminal project. The current car park has shortage of parking space. Also, the automatic
parking payment system is not yet installed causing frequent traffic jam.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Security
Screening Gate
Bus Stop
Toll Station
The airport access road serves from Mombasa Road to JKIA’s T1, T2, and cargo terminal,
and other airport offices including KAA headquarters building. The monthly vehicle traffic is around
375,000, regular bus traffic is around 10,000, and other big trucks and trailers are around 9,000.
After Mombasa Road, there is a security screening gate as shown in Photo 3-8 to screen for
unauthorized objects inside vehicles and cargo trucks by X-ray. The security check is strict, and all
passengers besides the driver must get off to go through the metal detector. It takes around 10
minutes.
The 30 times daily bus services from Nairobi City to the airport are operated by three
companies, namely: City Shuttle, City Hoppa, and Double M. The location of the bus stop in front of
T1E is shown in Figure 3-6 and Photo 3-9. The bus departs to the city when full. Entrance fee is
charged according to vehicle type; traffic jams frequently occur at the toll station shown in Figure
3-6.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Source:AIP
Currently, more than 90% of the approach direction is at 06; therefore, instrumental landing
system (ILS) such as ILS localizer, ILS glide path, and distance measuring equipment (DME) were
only installed at 06 side.
Major ILS locations are shown in Figure 3-8.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
1) International Passengers
The following models are made by regression analyses with the actual number of
international passengers and GDP.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
According to the above analysis, the international passenger demand forecasts of 2025
and 2035 are shown in Table 3-10 and Figure 3-9.
12
11 11,415,061
Terminal Passenger (Million Persons)
10
9
8 7,105,739
7
5,453,278
6
5
4
3 3,913,778
2
1
0
Year
Source: Study Team
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
2) Domestic Passengers
The following models are made by regression analyses with the actual number of
domestic passengers and GDP.
According to the above analysis, the domestic passenger demand forecasts of 2025 and
2035 are shown in Table 3-12 and Figure 3-10.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
5
4
2,070,295
3
1,403,009
2
2,941,946
1
0
Year
Source: Study Team
3) Transit Passengers
The following models are made by regression analyses with the actual number of
transit passengers and GDP:
A. A log model with GDP as an independent variable for 20 years (1996-2015, excluding
2004))
Transit PAX= GDP of Kenya 2.9903 x 0.00003
B. A log model with GDP as an independent variable for 10 years (2005-2015, excluding
2004)
Transit PAX= GDP of Kenya 0.5473 x 12,996.111
C. A standard linear model with GDP as an independent variable for 20 years
(1996-2015, excluding 2004)
Transit PAX=569.3043 x GDP of Kenya − 830,521.128
D. A standard linear model with GDP as an independent variable for 10 years
(2005-2015, excluding 2004)
Transit PAX= 173.8215 x GDP of Kenya + 518,821.7
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
・ Data trend before and after 2004 is quite different; and the one before 2004 has
low reliability; therefore, the analysis excludes the 2004 data;
・ Elasticity normally ranges from 1.0 to 2.0;
・ Elasticity of air traffic during initial stage is 1.5 to 2.0, which is high due to the
spread usage of aviation services and value of GDP growth rate;
・ The country has a growing aviation market, so linear model gives near actual
result; and
・ Based on the result of correlation and coefficient of determination, C is evaluated.
However, when considering that 1) passengers after 2005 range from 900,000 to
1,200,00 and 2) the growth rate is around 2.6%, C has high validity.
10
9
8
7
6
5
4
2,664,093
3 1,475,457
1,163,638
2
1 1,804,918
Year
Source: Study Team
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
4) Total Passengers
The total numbers of international, domestic, and transit passengers are shown in Table
3-15 and Figure 3-12.
18
17
16
15
14
13
12
11 8,999,031
10 11,852,603
9 6,480,425
8
7
6
5
4
3
2
1
0
Year
Source: Study Team
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
35
30
25
20
15
10
0
2011 2012 2015 2020 2025 2030 2034
As mentioned above, LBG conducted the forecast from 2012 to 2030 using the air traffic
data until 2010. Egis also conducted the forecast from 2015 to 2034 using the data until 2014. Since
both groups did not describe the detailed procedure and formula, comparison can be done based only
on the forecast results.
LBG and METI studies have almost similar trends (result) considering the five years
difference, i.e., 2030 forecast for LBG and 2035 forecast for METI. On the other hand, Egis and the
Study Team has about 400,000 passengers difference by the same manner of comparison.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
environment-related affairs and situations, the Guidelines were revised in March 2006 and revised
again as the 3rd edition in March 2014 by adding measures to meet the CO2 reduction targets and
promoting the use of renewable energy sources.
The basic concept of the “Eco-Airport Guidelines (3rd edition)” is shown in Table 3-18.
The Eco-Airport Guidelines provide policy and measures for the construction of airport
facilities, as well as their operations and administration.
Aviation fuel
・ Use of IoT to check the fuel level when needed for efficient refueling.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Security
・ Management of faces, fingerprints, and movements for enhancing
security, inspection system with odor sensor (in lieu of police dogs), and
theft protection using tags.
Other
・ Management of tenants’ sales
6 Design optimization Application of Demand forecast
cutting-edge ・ Forecasts future demand accurately using Japanese analysis technology
technologies in the (from macroscopic perspective based on GDP and various economic
design stage of airport indices).
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Figure 3-14 Result of Air Traffic Demand Forecast and Relationship with Timing of
Project Implementation
26
2017 2023 2035
24
Terminal Passenger (Million Persons)
14
12
10
10.6 Mill.
8
6
4
2
0
2005 2010 2015 2020 2025 2030 2035 2040
Year
Source: Study Team
3-27
Scope of thi
Figure 3-15 Layout Plan of Future Development Plan
Planed Location
Scope offor New
this PTB
Study
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Source: KAA
Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Source: KAA
Regarding the geology of this area, backfill soil and black cotton soil are found at the
surface of the land. However, they are not suitable to be utilized for construction works such as
foundation and filling material. On the other hand, phonolites soils are found uniformly, and they can
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
be used for construction uses. Therefore, it is mentioned that some sort of treatment is needed for
surface soil in the geotechnical investigation report in 2014 received from KAA.
Q Construction costs,
Q Contingency,
Q Consulting services,
Q Project management unit (PMU) cost,
Q Land acquisition cost,
Q Taxes, and
Q Interest during construction (IDC).
The cost is divided into local costs and foreign costs. The local costs are as follows:
The rough construction cost for the Project is estimated as shown in Table 3-20.
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Table 3-22 Installed Power Generation Capacity and Annual Output of Kenya
Installed Power Generation Annual Output
Power Generation Sources Capacity (December 2014) (2014/15)
(MW) % (GWh) %
Renewable Hydropower 821 37.8 3,466 36.8
energy Geothermal 593.5 27.3 4,060 43.1
Wind 25 1.2 37 0.4
Cogeneration 38 1.7 14 0.2
Import 79 0.8
Total 1,477.5 68.0 7,657 81.3
Fossil fuel Medium-speed
579.5 26.7 1,643 17.4
diesel
Gas turbine 60 2.8 4 0.0
High-speed diesel 25.8 1.2 36 0.4
Emergency plant 30 1.4 84 0.9
Total 695.3 32.0 1,767 18.7
Capacity/output of existing
2,173 9,424
sources
Source: National Energy and Petroleum Policy June 16, 2015, Ministry of Energy and Petroleum
Ep = H × K × P × (365‐3) ÷ 1
= 5.0 × 0.73 × 2,000 × 362 ÷ 1≒2.6 (GWh/yr)
Where,
Ep = Estimated annual output (kWh/year)
H = Sunlight received by solar panel per day in yearly average: 5.0 (kWh/m2/day)
No. of days with no sunlight: 3 days
K = Loss factor: approximately 73%
・ Yearly average loss due to rise in temperature of solar cells: approximately 15%
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Preparatory Survey for New Terminal Development Project at JKIA in the Republic of Kenya
Combining the 26 GWh that can be reduced by introducing the energy-saving eco-airport
technologies with the 2.6 GWh to be generated by solar panels, an annual savings of approximately
29 GWh will be possible.
Therefore, 6,812 kℓ of crude oil can be saved per year (an equivalent of approximately JPY
300.04 million based on JPY 50,000 per 1 kℓ of crude oil).
3-34
Chapter 4
1
There was an existing development plan of proposed new Greenfield Terminal (hereinafter
referred to as GFT), of which the master plan was studied by the Louis Berger Group, Inc. in 2011
and the feasibility study was conducted by Pascall+Watson Architects Ltd. in 2012. Furthermore, the
environmental and social impact assessment (ESIA) had been done. In this chapter, the
environmental and social considerations of the proposed new passenger terminal building were
studied with reference to the ESIA of proposed GFT, and the necessary actions for realization of the
project were proposed.
1
In 2012, KAA has appointed the Anhui Civil Engineering Group (ACEG) / China Aero-Technology
Engineering International Engineering Corporation (CATIC) Joint Venture (hereinafter referred to as
CATIC/ACEG JV) to design and build the new Greenfield Terminal (GFT).
Subsequently, Pascall+Watson Architects Ltd. (hereinafter referred to as PAW) has been appointed by the
CATIC/ACEG JV to carry out the architectural scheme design of the GFT and the Landside Interchange
and Forecourt (hereinafter referred to as LIF).
The Master Plan for the GFT has been carried out by LBG Consultants, which was retained as the project
manager. The site preparation work for the GFT commenced in December 2013. However, the project
was cancelled in March 2016 due to financial reasons.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Picture 4-1 Proposed Project Area for New Passenger Terminal Building and Second Runway
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
4.2 Outlines of Laws, Rules, and Regulations Related to Environmental and Social
Considerations in Kenya, and Necessary Action for the Requirements
(1) Outlines of Relevant Environmental Laws, Rules, and Regulations in Kenya and
Necessity Action for the Requirements
1) Outlines of Relevant Environmental Laws, Rules, and Regulations in Kenya
The basic law on environment in Kenya is the Environmental Management and
Coordination Act (EMCA) enacted in 1999 and executed in 2000. Under the EMCA, detailed
enforcement regulations for pollution control were formulated such as for air pollution, water
contamination, waste and noise. Through the execution of the EMCA, it becomes a requirement
to attach an EIA prepared based on the EMCA when permit for usage of natural resource and/or
development are applied to the concerned authorities in charge of the usage of natural resources,
implementation of construction and/or construction of facilities. Based on the EMCA, the
Environmental Impact Assessment and Audit Regulation (EIAAR) was enacted in 2003. This
regulation stipulates the procedure for EIA and environmental audit (EA), and requirements for
acquisition of environmental license. In addition, strategic environmental assessment (SEA)
was legalized in this regulation in 2009.
The National Environment Council (NEC) as environmental management organization
and the National Environment Management Authority (NEMA) as executing agency were
established in 2003.
b) Projects Required to Conduct EIA Study and Prepare EIA Report for Environmental
License
If NEMA judges that the impacts caused by the project will be significant or not
small by reviewing the Project Report, NEMA will request the proponent to conduct an
EIA study. The proponent shall prepare the EIA report and submit it to NEMA for review.
Examination period is within three months, including weekends, after the acceptance of
the EIA report.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Source: NEMA (2002), Environment Impact Assessment Guidelines and Administrative Procedures
Q National Environment Council (NEC): NEC is responsible for deciding the policy for
environmental protection and its priority. It is also responsible for setting national goals
and objectives related to environmental protection.
Q National Environment Management Authority (NEMA): NEMA was established as overall
coordinating agency for environmental protection in Kenya. Currently, based on the
“Constitution of Kenya 2010”, EMCA is being reviewed to address the issues on
environmental management that newly arises. In addition, NEMA is in the process of
delegating its responsibility to local authorities to conform to the Constitution of Kenya
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
2010. Some development projects in certain fields will be examined and issued the
environmental license by the local authorities, while NEMA still has responsibility for
issuing the environmental license for large-scale projects and coordinating with local
authorities for environmental management. In NEMA, there are five departments and one
branch office under the Directorate General, and 400 employees working therein.
Currently local offices oversee the review of EIAs and issuance of the environmental
license.
Q Public Complaints Committee: Under the EMCA, a Public Complaints Committee was
established to function as administrative mechanism related to environmental problems.
Members of the committee include representatives of the legal bar in Kenya, NGOs and
the business community. The committee investigates complaints related to environmental
devastation and deterioration.
(2) Necessary Action for Requirements under the Relevant Law/Regulation of Land
Acquisition and Involuntary Resettlement
Since the proposed new passenger terminal building is developed in the airport area, land
acquisition and involuntary resettlement is not required.
Q The proposed new passenger terminal development project will be implemented within
JKIA boundary.
Q Environmental license was obtained and the licensing fee was paid once.
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
since individual development projects are all located in the airport area and several contents to be
considered in each EIA are overlapping.
Hence, NEMA has requested for KAA to conduct SEA for the overall development project
of JKIA first to acquire the permission, then to reacquire the environmental licenses for individual
projects. Prior to renewal of the environmental license for the proposed GFT development project,
KAA needs to review and consider SEA for the overall development project of JKIA and conduct
supplemental survey to acquire permission of SEA by NEMA.
4.4 Requests Related to Environmental and Social Considerations from the Implementing
Agency to the Japan Side
The implementing agency (KAA) requested the Japan side to include the items listed below
in the ESIA, by the letter of KAA/5/02/2 VOL. 5 (7). The next study in future should consider these
items as the study scope.
Q Water consumption/demand at the proposed new passenger terminal (during project
implementation and beyond 2035)
Q Waste management at the proposed new passenger terminal (during project
implementation and beyond 2035)
Q Land-use management plan around JKIA
Q Transfer of technology/extensive capacity building
4-6
Chapter 5
(1) Conduct construction cost estimate for new passenger terminal with maximum 11.5 million
passengers / year.
(2) Conduct estimation for aeronautical and non-aeronautical revenues and associated OPEX to
operate the new passenger terminal thought the 30 years operation period. (2024~2053), and
generate cash flow model.
(3) Conduct a financial evaluation with using IRR to assess the financial feasibility and sensitivity
analysis in order to assess the upside and downside scenario
(4) Conduct financial evaluation under the PPP scheme in consideration of the direction of the
Government of Kenya to reduce external debt and also qualitative analysis to assess and
identify key issues regarding the PPP scheme
5.1.1 Assumptions
The assumptions of the project cost are defined as follows:
(1) Capacity of the new passenger terminal: 11.5 million passengers /year
(2) Runway
Following runways is expected to be accessible during the operation.
1st Runway: Length 4.2 km, width 45m
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
(3) CAPEX
The assumptions of the CAPEX are shown in Table 5-1 below:
US$
Code Works Quantity Unit
Rate Amount(thousand)
100 Civil Engineering Works 129,595
Airside
Commercial Apron 155 m2 572,000 88,660
Taxiways 155 m2 57,000 8,835
Taxiway Shoulder 75 m2 88,000 6,600
GSE Areas 100 m2 76,000 7,600
Landside
Vehicular Parking Areas 100 m2 123,000 12,300
PTB Access Road 100 m2 37,000 3,700
Airport Access Road 100 m2 19,000 1,900
200 Passenger Building Works 393,086
Basement (3011 m2) 1 Lot 7,527,500 9,664
Ground Floor (54748 m2) 1 Lot 73,912,000 94,887
First Floor (15376 m2) 1 Lot 38,440,000 49,349
Second Floor (53245 m2) 1 Lot 133,112,500 170,888
Special Equipment 1 Lot 19,638,332 25,211
BHS Outbound 1 Lot 13,422,000 17,231
BHS Inbound 1 Lot 2,141,000 2,749
Elevated Roadway 1 Lot 18,000,000 23,108
300 Utility Works 6,208
Power Receiving System 1 Lot 1,327,434 1,327
Power Supply System 1 Lot 823,009 823
Communication System 1 Lot 141,593 142
Water Supply System 1 Lot 508,396 508
Sewerage Treatment System 1 Lot 752,434 752
Solar Power System 1 Lot 2,654,867 2,655
400 Land Acquisition Costs
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
5.1.2 CAPEX
Following
Table 5-3 shows the CAPEX cost estimate.
4. (1+2+3) 698,133
5. Project management cost (KAA) 0
6. Land cost 0
7. Tax 0
8. Project Cost 698,133
9. Interset during construction 0
Total 698,133
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
5.2.1 Methodology
Financial assessment and analysis is conducted to calculate Internal Rate of Return (“IRR”) in
consideration of CAPEX, revenue, OPEX and interest which is required for the construct and
operation of the project.
In addition to above, sensitivity analysis is carried out focusing on the items such as revenue and
expenditure which is assumed to have a great impact on the project economics.
(1) CAPEX
Refer to 5.1.2 above.
(4) PAX
Annual passenger forecast is based on following Table 5-5:
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Existing terminal is assumed to be utilized after the commencement of the new passenger
terminal operation. The maximum capacity of the existing terminal is estimated 10.5
million/year until 2024, and it would reduce to 8.0 million/year after 2025 due to the closure of
the T-2, so the new passenger terminal is supposed to absorb the surplus passenger of the
existing terminal. The new passenger terminal is expected to reach the full capacity on 2036
under the current assumption.
(5) Revenue
Revenue of the new passenger terminal is calculated as follows. The inflation of the revenue is
not considered
1) Aeronautical Revenue
ü Parking Charge = Number of parking aircraft(Total aircraft movement÷2)× unit rate
(weighted averaged)
Small size Middle size Large size
15/US$/time 40US$/time 90 US$/time
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
Unit Rate
0.19 US$/PAX
Landing charge is excluded from the revenue calculation, since it is expected not to
be paid to new passenger terminal directly.
2) Non-Aeronautical Revenue
Based on the JKIA budget, the non-aeronautical revenue will be account for 36% of the
aeronautical revenue (excluding landing charge).
The contents of the expected non-aeronautical revenue are tenant fee, catering service
charge, ground handling charge, advertisement fee, and car parking charge.
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Case 1. Construction project (ODA STEP) + PPP (Concession to the private sector for the terminal
operation.
Case 2. Full private investment (PPP/BOT)
Following assumptions shown in Table 5-8 are input to evaluate the case 1, 2 above.
Based on the result above, it is revealed that the case-3 is not commercially feasible, since the IRR is
far below both equity cost and WACC. Therefore, private firms are not able to make an investment
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On the other hand, the IRR of the case-2 is lower than ODA case, however, IRR for the equity
shareholder is not far from the cost of equity and the KAA revenue through concession fee is
expected to reach certain amount for justifying this case. Therefore, this case could be feasible for
both private sector and public sector, since both parties will be able to enjoy certain benefit thought
the project. However, the detailed terms and condition should be carefully considered and studied
further in the next step.
For reference, the following matrix summarizes the features and the pro-cons for the considered
three cases.
Table 5-9 Outline of the respective cases
KAA KAA
Case2: ODA Foncession
After construction by ○ Low interest loan
ODA(STEP) ODA Bid Bid
ODA, operator is ○Utilizing private know-how
+Concession Construction Operation
selected by concession △Demarcation between existing and new PTBs
bid and undertake
KAA SPF operation
Case3: PrivaPe・AfDB Private investment ○Private know-how (World-class operator)
Private(PPP/ PPP Bid AfDB loan:6% △Private Company’s intention for participation
BOT) Construction Operation
(Feasible or Not)
△Demarcation between existing and new PTBs
SPF SPF
The focus of this report is to investigate the feasibility of the new passenger terminal and assess both
technical and financial aspects. However, the demarcation between existing terminal and new
passenger terminal would be one of the most critical issues for successful development of JKIA.
Considering the situation above, there is another option for the concession scheme where the
concessionaire would operate both existing and new passenger terminal subject to the further
assessment and consideration of the Government of Kenya. It is expected that multi-operators for
one airport will force the JKIA to be put in a difficult situation to optimize the entire JKIA operation.
Therefore, one-operator for one airport is recommendable solution in order to avoid the scenario
above.
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Chapter 6
6.1.1 Rehabilitation of the Existing R/W, T/W and Apron (Parallel Taxiway Expansion)
The maintenance and necessary rehabilitation of the airport basic facilities in the air-side is the most
important elements which is very essential to the safe and stable take-off and landing of the aircraft.
At JKIA, the shorter parallel taxiway than the runway length and no rapid exiting taxiway cause it
longer occupancy time of the aircraft on the runway.
Kenya Airport Authority (KAA) is now planning to expand the parallel taxiway that is aiming at the
increase of the runway capacity as well as to shorten the time for aircraft movement between the
runway and the passenger terminal (Taxing time).
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The design of the rehabilitation is now planned to be carried out by Netherland NACO (Netherlands
Airport Consultants) by finance of the World Bank (WB), and the increase of the passenger capacity
by the rehabilitation is expected to be 3.0 million per annual. Therefore, the annual passenger
capacity of the Existing PTB (T1) becomes 8.0 million from the current capacity of 5.0 million.
KAA is planning to reinforce the passenger capacity of JKIA, and aiming at the airport of the
world-class in passenger services to secure the firm position as a gateway to the East Africa, and also
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intending to establish a higher eco-airport with regard to the power supply circumstances in Kenya.
In case of the original PTB (1), the new PTB is built in the almost center in the airport site, and the
location is reasonable with the similar distances for the aircraft taxing from both of the existing and
the planned new runways. On the other hand, the movement distance for passenger between the
existing and the new PTBs becomes longer compared with the PTB (2). As a result, accessibility
led to passenger service might be lower especially for transit passengers.
In case of the alternative PTB (2), passenger’s movement distance between the existing and the new
PTBs becomes shorter, and the access distances from the airport entrance to both PTBs are almost
same, it is more convenience for passenger to come and find his check-in counter. And, the
distance between the new runway and the new PTB becomes shorter to save the taxing time. On
the other hand, the several facilities such as the cargo complex, commercial mall and so on
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positioned in the Airports Master Plan issued 2011 need to be relocated by the necessary
coordination with the relevant parties.
(2) Location of the cargo complex and Airport Layout (Plot Plan)
In case of the PTB (2) mentioned above, the location for the cargo complex planned in the Airport
Master Plan (CTB in the figure 6-3) might be relocated to the other place, or the shape of the new
PTB might be considered to change to rectangular type and so on for saving the space.
Necessary space for the new cargo complex have to be secured considering with the future
expansion, because the existing cargo complex is located in the southwest end of the airport site with
less space for expansion. The capacity and location of the new cargo complex have to be designed
based on the air cargo demand forecast, and considered the better location that is advantageous to
conveyance of the cargo by freighter as well as the cargo by passenger aircraft (belly cargo).
As described above, relocation of one facility causes the other facilities to be moved. In other
words it becomes the billiards state. In order to avoid such a situation, the Airport Layout (Plot
Plan) considering expansion space has to be prepared carefully through the discussions with the
relevant parties.
6.2 Necessity of Detailed Master Plan (Revision of the Airport Master Plan)
The major 4 projects in JKAI are now carried out on the basis of the Airport Master Plan (Kenya
National Airports System Plan) issued in 2011 made by the US Louis Berger Group, Inc., etc.
Because the circumstances surrounding JKIA including the passenger volume decrease by the
terrorism outbreak in 2013 have changed after then in Kenya, the immediate revision of the Airport
Master Plan is required. For example, the air traffic demand forecasted curve described in the
Chapter 3 (forecasted in 2015) is changed in comparison with the demand forecasted curve in the
Airport Master Plan (forecasted in 2011) about five years late. More proper capacity and the time
limit of each facility rehabilitation and construction should be revised based on the latest demand
forecast.
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Additionally in the JKIA Detailed Master Plan, with the increase of future air traffic demand, it is
expected to be made a concrete and clear policy that is including the optimization of the airport
layout (plot plan) of JKIA, the enhancement of safety and security measures, the realization of the
higher eco-airport, and so on. And it is necessary to firm the position of JKIA as a gateway for the
East Africa based on "Kenya Vision 2030 which was devised as a long-term development strategy by
the Kenyan Government in July, 2008. (refer to Figure 6-6)
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preconditions for preparing for the project implementation schedule in this report. (refer to Phase 1
in the Figure 6-7)
(1) Construction of the new PTB is done by Japanese ODA (STEP) as its finance source.
(2) Operation and maintenance for the new PTB are done by the third party (Concessionaire).
It is expected to increase the airport value by utilizing the world-class airport operator as well as
to obtain the latest know-how in the airport operation and maintenance.
(3) Based on the JKIA Detailed Master Plan, the new PTB is well harmonized with the other
projects carried out at JKIA.
Fig. 6-7 Proposed scheme for finance and operation for the new PTB
On the other hand, the Japanese Government promotes airports in Japan to materialize the higher
“eco-airport”. The expectation to the “eco-airport” is also very high in Kenya especially it is
aggressive to introduce the energy-saving technology considering the power supply circumstances in
Kenya. Therefore, the pursuit of the “eco-airport” based on the cooperation of Kenya and Japan
could expect the possibility of introducing the Japanese latest eco-technologies into Kenya and
combination research and development, and it may be said that there is the merit for two countries.
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Fig. 6-8 Privatization of the major airport in Japan and realization of the eco-airport
(1) Parallel Taxiway Expansion (Rehabilitation of the existing R/W, T/W and Apron)
This project aims at the increase of the runway capacity. The passenger capacity is expected
to increase indirectly through the increase of number of aircraft movement. Therefore, the
time limitation of this project based on the passenger traffic demand forecast cannot be shown
clearly. However, possible early expansion is required, considering the needs to invite the
large aircraft.
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T2 that was built as the design life of 10 years in 2015 finishes the position quota in 2025.
Then, the passenger capacity of 2.5 million/year is decreased at JKIA.
Therefore, the annual passenger capacity of the existing PTB at JKIA has to be considered as
10.5 million (T1:8.0 + T2:2.5 million) by 2025, and only 8.0 million (T1:8.0 million) after 2025,
with adding 3.0 million increase to T1 by the rehabilitation.
According to the demand forecast described in the Chapter 3, the annual passenger volume
becomes approximately 10.5 million in 2023 that is equal to the total capacity of JKIA then.
Therefore, it is necessary to complete the construction of the new PTB at JKIA in 2023. KAA
is requested to start both projects of T1 rehabilitation and the new PTB construction in parallel
as soon as possible in order to prevent the passenger capacity excess at JKIA.
In terms of the passenger capacity for the new PTB, it is planned based on 8.0 million of the
passenger capacity of the existing PTB after 2025 as a precondition. As mentioned in detail in
the Chapter 3, the new PTB should be available for the passenger demand until 2035.
Therefore, it is recommended to plan the new PTB at JKIA with the annual passenger capacity
of 11.5 million as phase 1 of the development. As a result, total annual passenger capacity
becomes 19.5 million (T1:8.0 + new PTB:11.5).
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Fig. 6-9 Time limitation of each Project at JKIA based on the PAX demand forecast
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Pre-feasibility Study for New Terminal Development Project at JKIA in the Republic of Kenya
(1) Rehabilitation of the existing PTB (T1) and Expansion of the air-side facilities
It is recommended that the projects for T1 rehabilitation, parallel taxiway expansion and the 2nd
runway construction are commenced as soon as possible.
The figure 6-10 on the next page shows the each project implementation schedules based on the
acquired information in the survey carried out in October, 2016.
On the other hand, for the operation of the new PTB by the third party (concessionaire), it must
be made based on the procedure determined in the Kenyan PPP law. The necessary work
activities such as preparatory study (PPP Feasibility Study) for basic design and PPP scheming,
preparation for concessionaire selection are referred to the Japanese procedure for the airport
privatization.
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Reproduction
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