Tanzania has secured $164.3 million from the Netherlands for the expansion of the Julius Nyerere International Airport in Dar es Salaam. The new terminal, Terminal Three, will address pressing capacity constraints at the airport.

Suleiman Suleiman, the director general of the Tanzania Aviation Authority (TAA) said the project will take three years to complete, adding that the government has already signed a contract — for design, construction and associated works — with Royal BAM Group of Holland (BAM International).

“The airport’s original capacity was tailored to handle 1.2 million passengers per year, but the current use is nearly twice that number at over 2 million passengers in 2012,” he said.

TAA said the first phase of the project will grow the airport’s capacity to 3.5 million passengers, and Phase Two will increase the capacity by a further 2.5 million passengers annually.

TAA legal secretary Ramadhani Maleta said a feasibility study to establish the construction cost was conducted last year, and the authority is reviewing the process to arrive at precise figures due to the fluctuation of the Tanzania shilling.

BAM International has previously carried out renovations at Terminal Two — which will, upon completion of the new terminal, be used solely for domestic flights.

Tanzania joins Kenya and Rwanda, which are expanding their major international airports.

Analysts say East African governments are likely to increase airport fees as they look for additional financing, a factor that would reduce the competitiveness of regional carriers since it will make their fares expensive, especially as they do not enjoy low fuel costs like their peers in the Middle East.

Rwanda is in talks with the China State Construction Engineering Corporation to construct the Bugesera International Airport expected to cost over $650 million.

Kenya has been planning a temporary terminal at its main airport as it awaits construction of the planned extension — a project national carrier Kenya Airways is banking on to expand its operations.

The Kenyan government has budgeted Ksh55 billion ($647 million) for the terminal which is expected to take three years to complete.

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

Tanzania is also planning a multimillion-dollar upgrade of the Kilimanjaro International Airport, through the refurbishment of runways, aprons, taxiways and passenger lounges.

Uganda is putting together financing to get the Entebbe Airport Master Plan off the ground, activities that can only be financed through regulatory fees.

In recent years, the Tanzanian government has invested heavily in the modernisation and refurbishment of primary and secondary airports, and is currently engaged in a series of construction projects for smaller airports, with the construction of Bukoba airport’s new facilities due to be completed next month.