Airports Company engages lenders over debt

The Ghana Airports Company Limited (GACL) is currently engaged in discussion with lenders about meeting its obligations, despite the adverse impact of the COVID-19 pandemic on their operations.

The airport operator, in a statement issued on Monday, August 10, 2020 and copied to Business24, said it triggered “the force majeure provision under the loan agreement and has been in discussion with its lenders to meet its obligations.”

Given the year-on-year growth in passenger throughput between 2012 and 2019, the state-owned limited liability company, which is one of the exemplary SOEs, secured loans on the back of its own balance sheet to develop on-ground infrastructure at Kotoka International Airport in Accra, Tamale Airport and the Ho Airport.

About US$350million was spent on the construction of Terminal 3 and other ancillary works at the Kotoka International Airport, US$130million expended on the construction of a new runway at the Tamale Airport, and a further US$25million used for the construction of a new airport at Ho in the Volta Region.

The GACL, whose revenues are neither capped nor realigned in accordance with Capping and Realignment Act, was able to service its debts until the current pandemic led to the drying up of scheduled international passengers and with it the Airport Passenger Service Charge (APSC)—the major revenue source for servicing outstanding loans.

The country’s borders—land, sea and air—were closed in March, as part of a raft of measure to help contain the spread of the COVID-19 pandemic. It is still unclear when the airspace would be opened.

Business24 sources say the central government, as part of the COVID Relief Programme, has extended relief support to the GACL. “Government is helping pay GACL staff salaries till the end of the year as part of the support,” the source said.

Management fights off Kotoka Airport sale claim

GACL says recent comments by senior statesmen that the country’s main international airport is to be sold to foreign investors or being privatized for a token is untrue.

Following the Aviation Ministry’s confirmation of the signing of a Memorandum of Understanding (MoU) with a consortium, TAV-Summa, to assess a proposal for private capital injection and a partnership with GACL, various stakeholders have raised issues.

“Kotoka International Airport is not for sale or being privatized as stated by GACL in an earlier press release. Rather, an unsolicited proposal has been received from a Turkish Consortium which is yet to be considered. It is rather unfortunate that certain figures from the proposal are being used to peddle untruths,” management of the company said.

Possible areas for collaboration with TAV-Summa, which were outlined by the Aviation Minister in a concept note he submitted to the GACL and other stakeholders, include: a soft loan with longer tenor for GACL, reconstruction of the Kotoka International Airport (KIA) runway at an estimated cost of US$40m, a multistorey car park at Terminal 3, and construction of a light rail system for the KIA enclave to connect the three main terminals and facilitate movement within and into the area.

Others include the construction of an airport green park—an eco-friendly recreation area with various facilities—to generate revenue while maintaining about 60 percent of the greens on the stretch between the KIA airport roundabout and the Hajj Village.

Additional airside developments, investment in systems and technology, a budget transit hotel, and other ideas were captured in the Minister’s concept note sent to the GACL for discussions.

These proposals, according to the statement signed by the Management of GACL, does not in any way constitute a sale of the KIA or privatization of GACL.

“Management of GACL would like to assure the general public that Kotoka International Airport is not for sale. The vision of making Ghana the preferred aviation hub and leader in airport business in West Africa remains a priority,” the statement said.