Interest rate on loan for KIA Terminal 3 project expensive – Kofi Adda
Ghana’s Aviation Minister Joseph Kofi Adda has described the interest rate for the loan secured for the construction of the Terminal 3 at Kotoka International Airport as too much.
In 2015, Ghana Airports Company Limited (GACL) secured a US$250 million loan for the construction of Terminal 3 at an interest rate of Libor plus 8.5%.
The loan was approved by a consortium of banks led by Ecobank Capital.
The Terminal 3 project at the time was meant to expand the facilities at the Kotoka International Airport to accommodate the gradually increasing number of passengers as well as increasing the number of airlines servicing the airport.
But while giving his keynote address at the sod-cutting ceremony for the construction of the Ghana Civil Aviation Authority’s New headquarters building and the Kotoka International Airport Northern Apron Project today, Tuesday, Mr. Kofi Adda said the expensive nature of the credit facility is negatively affecting the Ghana Airports Company Limited by preventing it from taking up more projects, as it’s revenue is being held in escrow to service and retire the loan.
“I therefore want to draw to the attention of the heads of agencies on the need to protect the public purse as far as public procurement is concerned. In the recent past the high concentration of operational cost and the use of expensive money cost to carry out projects; in some cases, the high rate on loans such as the loans for the terminal 3 airport…facility attrated an interest rate of +/- 3.5 percent [which] at the time was very high.”
Commissioning of Terminal 3 postponed
The new Terminal 3 project was a design and build concept undertaken by Turkish construction company Mapa Construction MNG Holding.
In September 2015, the African Development Bank (AfDB) approved a $120m loan with a tenor of up to 15 years for the project.
It was the first private-sector investment made by the bank in Ghana’s transport sector.
President Akufo Addo was expected to officially inaugurate the facility for September 15, 2018 but it was postponed indefinitely
Minority questions decision to postpone commissioning of KIA’s Terminal 3
The Minority in Parliament at the time questioned the government’s decision to indefinitely postpone the official commissioning of the newly constructed Terminal 3.
The Minority spokesperson on Foreign Affairs, Samuel Okudzeto Ablakwa in a write-up bashed government for the postponement.
“As Ranking Member on the Foreign Affairs Committee of Parliament, I am terribly worried about what this pettiness does to brand Ghana and the ramifications for future strategic partnerships with the international business community with its resultant effect on the already struggling Ghanaian economy. And as for our official ties with the United Arab Emirates; if what I am picking up is exactly the case, then we must begin to tighten our seat belts for the turbulence ahead in our diplomatic relations, Ablakwa said in an article on the matter.”
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Source: citinewsroom