The cost of airport accessibility – Is Uganda paying the price?

The adaption of the famous ‘if you build it, he will come” quote that Kevin Costner hears in the film ‘Field of Dreams’ has turned into a popular saying for airport infrastructure investment strategies. But an airport can only succeed with the necessary support infrastructure, none more so than the ground transport system that delivers passengers and staff to and from the facility. There is no point building an airport if people can’t get to it!

A great example is in East Africa where concerns are mounting over the amount of debt a country has taken on to finance the construction of a 30 mile motorway connecting the country’s capital city and its international airport, according to Reuters. Entebbe International Airport, the principal international airport of Uganda is located close to the shores of Lake Victoria, approximately 25 miles (40km) south-west of the central business district of Kampala, the capital and largest city of Uganda.

While 25 miles is actually quite conservative in terms of distance between city centre and airport in today’s environment, the road system is poor and journey times can regularly take around two hours at busy times of day. Those journey times will soon by cut to just 30 minutes through the construction of a new road.

CHART – Entebbe International Airport continues its growth, albeit rates are much slower than the boom years of the 2000s when six consecutive years of annual double digit traffic rises were recordedSource: CAPA – Centre for Aviation and OAG

Uganda says the four-lane road is the jewel in the crown of an infrastructure programme that will boost economic growth. The government has partly funded the 30-mile $580 million stretch of road with a loan. Construction started in 2012 and was initially due to be completed within five years.

The project, which should now be completed in May, is being constructed by a Chinese company. It is just one infrastructure project China is undertaking in Uganda as part of its Belt and Road Initiative and which has seen China loan the East African nation nearly USD3 billion. It is also in talks for USD2.3 billion more, according to reports.

While certainly a benefit for passengers arriving and departing at Entebbe International Airport and well received by those that have been forced to endure the heavy traffic jams that have been common place in the past, the project is mired in controversy with suggestions that Uganda is clearly paying the price for this improved accessibility, with many in the African country questioning the value-for-money of the scheme.

CHART – While long running talks continue over the resurrection of national carrier, Uganda Airlines, it is foreign airlines that dominate the schedules at Entebbe International AirportSource: CAPA – Centre for Aviation and OAG(data: w/c 05-Feb-2018)

Uganda’s Auditor General John Muwanga noted in a 2015 report that the road’s cost per lane per kilometre was double that of Ethiopia’s Addis-Adama Expressway, which was built by the same Chinese company, China Communications Construction Co. “The project costs could have been much lower if the contractor had been procured through competitive bidding,” the report noted.

Concerns are mounting that Uganda may not be able to pay off the large debts it is racking up through its infrastructure binge. It has borrowed USD11 billion in the decade since the World Bank wrote off USD3.5 billion of its debt as part of a debt relief programme.

Worryingly, economic growth in Uganda slowed to 3.9% in the latest financial year, down almost one full percentage point from 4.8% in the previous year. This year, the central bank projects that growth will again rise to around 5%, but this estimate is still below the figure needed to absorb new entrants to the job market in the youthful nation of 29 million, reports Reuters.