President Uhuru Kenyatta said the goal is to make Jomo Kenyatta International Airport one of the world's leading air terminals. The revamped airport will serve 20 million passengers a year, up from 6.5 million passengers currently. Construction on the new $635 million terminal is expected to last until 2017.
In August a small fire at the Nairobi airport swelled into a roaring inferno that destroyed the arrivals terminal. Firefighters were desperately short of equipment and crews took hours to control the flames. Kenyatta said the fire, which was caused by an electrical fault, "threatened our vision" of Nairobi's airport being the gateway to Africa.
Tourism fuels Kenya's economy. The country's safari parks and white-sand beaches beckon more than a million tourists per year, with most coming from the U.K. and the U.S.
Nairobi's airport is far bigger than any other in the region, but the cement structure is old, cramped and uncomfortable. Passengers are often made to walk across a busy tarmac to board their plane, one of the reasons the United States does not allow direct flights from Kenya.
Aly-Khan Satchu, who once ran the global trading desks in emerging markets for Credit Suisse First Boston and now runs his own financial management business in Nairobi, said Kenya must cement its position as a transportation hub by laying more infrastructure groundwork. With the new airport terminal, Kenya is making a play to be the Africa-Asia transit hub, he said.
"All the U.S. multinationals setting up shop here like Kenya Airway's routes into other African countries," Satchu said. "But if Kenya Airways is going to be an airline leader it has to have a first class airport. The airport experience now is just so awful."
During Tuesday's groundbreaking, Kenyatta noted that airports boost economic growth and give tourists and businessmen a first impression of the country, and can thus influence foreign direct investment.
Kenya in recent days also launched a multi-billion-dollar railway project to link its port city of Mombasa with Nairobi, a line that will run on to Uganda and possibly Rwanda and South Sudan.
Both transportation projects are being financed largely with Chinese money. Kenyatta on Tuesday thanked the African Development Bank, the World Bank, the European Investment Bank and China, the only nation he singled out individually.
Construction projects in Kenya are prone to costly delays and corruption. Kenyatta urged project managers to overcome those hurdles.
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