Normalcy should return to Kenya’s Jomo Kenyatta International Airport in the next few weeks once a temporary terminal is set up in response to the fire crisis.

President Uhuru Kenyatta announced that the terminal, with a capacity of 2.5 million passengers, would “be ready and working in the coming weeks.”

READ: Temporary terminal at JKIA to offer quick reprieve for airlines

Meanwhile, the country has had to alter its ambitious Ksh60 billion ($705.8 million) expansion plan for the airport as the effects of the fire — whose cause is still under investigation — continue to be felt.

The plans, which entailed a number of projects, were aimed at expanding the airport’s infrastructure as it seeks to cement its position as one of Africa’s key hubs alongside Ethiopia and South Africa.

The president’s announcement of the temporary terminal breathed new life into the project that was shelved in May, a month after the work, estimated to cost Ksh1 billion ($12 million), had been tendered.

ALSO READ: Kenya floats $12m tender for temporary terminal

A source said the plan was shelved because the government could not raise the required cash, but with President Kenyatta’s announcement, Treasury will have to rework its spending plan to factor in the financing.

The temporary terminal was planned to have a capacity for 2.5 million passengers, thus enabling the Kenya Airports Authority (KAA) to expand its current three terminals without too much disruption.

The president also announced that the commissioning of the new Terminal 4, currently under construction, will have to be fast-tracked to earlier than the projected March 4, 2014 date.

By the time of going to press, the airport was operating at 70 per cent capacity.

The planned renovation works at the JKIA’s current terminal — which has three units — will also be altered. The government is considering expanding the scope of a consultant hired earlier this year for rehabilitation of the airport’s Units One, Two and Three to take into account the section that was destroyed.

“We are taking stock of the damage at the Arrivals Terminal but have not yet quantified the cost. But we do not intend to do patchwork to use the area. We intend to do a full refurbishment of Terminals One, Two and Three once our new temporary terminal is ready,” said President Kenyatta at a press briefing on Friday.

Michael Kamau, Cabinet Secretary in charge of Transport, said the World Bank and African Development Bank had made “immediate offers” of financing to help rehabilitate the Nairobi airport.

It has also emerged that Kenya had settled on Exim Bank of China to finance the planned Ksh57 billion ($670.5 million) greenfield airport project.

The Vision 2030 flagship project, which was mired in controversy over the tendering, was supposed to kick off in August last year, but the starting date is still unclear.

Exim Bank, a source said, would finance the project to the tune of 85 per cent — Ksh 46.7 billion ($550 million). The facility is expected to be equipped to handle 12 million passengers a year.

Financing the expansion projects has been a challenge for Kenya, one reason why construction of the temporary terminal was shelved.

Initially, the KAA had planned to expand the existing Units One and Two as soon as it completed the ongoing construction of the new Ksh4 billion ($47 million) Unit Four sometime next year.

Analysts said with the government strapped for cash, it is likely to increase airport fees as it looks for financing, reducing the competitiveness of the local carriers by making their fares more expensive, especially as they currently don’t enjoy low fuel costs like their peers in the Middle East.

Currently, the airport handles about 6.5 million passengers a year against an installed capacity of 2.5 million.

Current expansion works — construction of Unit Four and rehabilitation of Units One, Two and Three — are expected to push capacity to eight million. The KAA had already secured a Ksh8 billion ($93 million) loan from the European Investment Bank for giving the three units a facelift.

The expansion is being undertaken to cater for 10.9 million passengers expected to be using JKIA by 2015, with the number projected to rise by 55 per cent to 17 million in 2020.

JKIA, like most African airports, is expected to see an increase in passenger traffic as the continent opens up to the world for business.

The need to expand the airport is highlighted by the aggressive growth plans most carriers have: To increase their fleet and almost double their passenger numbers in 10 years’ time.

Kenya Airways, the national carrier, has singled out capacity constraints at the airport as one of its key challenges, saying it could hurt its growth and profitability in coming years, especially as it continues to receive more planes.

Currently, KQ generates over half the airport’s passenger traffic but it has in the past expressed concern over the slow pace at which expansion works at the airport were being carried out.

“It’s a concern for us, our Mawingu plan [the airline’s 10-year expansion plan] depends on how fast the airport can grow to support the additional aircraft and passengers,” said Titus Naikuni, the CEO of Kenya Airways, in a past interview.

Analysts contend that a delay in expanding the airport will adversely impact on the national carrier. “We think the JKIA expansion and the availability of funding are two other major obstacles for KQ,” said analysts at Citigroup in a research report.

As a sense of normalcy slowly creeps back at JKIA, KQ will be hoping the government quickly finds a lasting solution to the airport infrastructure mess that continues to hurt the operations of the national carrier, which has JKIA as its hub.

Indeed, KQ was the worst hit by the shutdown among the airlines that use JKIA.

On Thursday, following the fire, KQ was operating at 35 per cent capacity. Its share closed the week two per cent lower at Ksh9.35, as the market reacted to news of the disruption.

The airline is being squeezed from all sides: The domestic market is attracting new competitors, KQ’s rivals in its bread and butter African market are getting smarter, regulators are getting stricter, and macroeconomic factors like fuel prices are rising.

But not everything is going wrong for KQ. The airline said last week its passenger numbers increased 10.9 per cent in its first quarter ended June. Total passenger numbers rose to 932,912 in the three months to June compared with 841,223 in the same period last year, helped by increased traffic on its domestic, Africa, Middle East and Far East routes.

Tanzania is planning a multimillion-dollar transformation of its Kilimanjaro International Airport with an eye to developing it into a regional hub.

The move will see all runways, aprons, taxiways and passenger lounges refurbished to offer holidaymakers a hassle-free trip to the northern Tanzanian tourist circuit.

Rwanda’s government, on the other hand, plans to build a new airport, Bugesera International Airport, located 25km southeast of Kigali, at a cost of $350 million.

Uganda’s Civil Aviation Authority plans to spend a large chunk of its procurement budget of Ush64 billion ($24,431,000) for the current financial year, to expand Entebbe Airport.

The fire gutted the JKIA’s international arrivals section, forcing planes and passengers to be re-routed to Kisumu, Mombasa, and Eldoret, as well to neighbouring countries.

The insurance company that provided the airport’s insurance cover has said it is investigating the cause of the fire, and that it will settle it soon.

“We have already deployed loss adjustors to the site to take stock of the situation and give us their reports. Our reinsurers have also been informed of this loss and we are waiting for the formalities to be complete for us to process the claim,” said Suresh Kumar, chief operating officer at APA Insurance Ltd.

KAA estimates that the airport contributes about 10 per cent to the Kenyan economy, being the main entry point for the two million tourists who visit the country every year.

The airport has also been strategic in attracting multinationals like IBM, Samsung, Google, GE and Vodafone to set up shop in Nairobi as their operation base for the rest of the continent.

Kenya Airways operates the biggest network in Africa, connecting almost all African capitals to Nairobi: Multinationals can travel to other countries easily.

Expansion works at the airport have been dogged by controversy.

Two Chinese firms, Anhui Construction Engineering Group and state-owned China National Aero-Technology International Engineering Corporation were awarded the tender to construct the new airport terminal, but Amos Kimunya, the former finance minister, contested the award alleging corruption.

This led to the temporary suspension of Stephen Gichuki, the managing director of KAA.