Modernising O.R. Tambo International Airport with ACSA
Background
Africa represents only 4.5% of global air traffic, not nearly enough to ensure the economic development of the continent.
South Africa is the hub for the flow of people and goods in Southern Africa and as such has the role as the main hub for intra-and intercontinental air traffic. The development of airport infrastructure is therefore essential for the economic growth of the country and that of the entire region. It is in particular a prerequisite for the development of tourism, of which the growth rate - 5% in South Africa - is one of the major contributors to job creation in a region with very high unemployment rates - about 40 % in South Africa as defined by the International Labour Organisation.
The prospect of the 2010 FIFA World Cup in this country reinforces the urgent need for the expansion and modernisation of the national airport infrastructure.
Airports Company South Africa, ACSA, is the public operator of airports in South Africa. It owns and operates ten airports including South Africa's three major international airports in (Johannesburg, Cape Town and Durban), which generate 93% of its revenue. To achieve the required upgrades of these airports, ACSA has developed an investment plan of ZAR17,9. billion (about € 1,7 billion) over the period 2008-2012.
In the current international financial crisis, South Africa's financial market has restricted the availability of long term funding in favour of short-term financing that is not well suited to investments to be carried out by ACSA. The AFD [Agence Francaise de Développement] has a mandate to support South Africa's growth at this critical juncture: through long term loans, it helps to reduce the cash deficit, enabling key economic players to achieve their development strategy. It intervened as "contra-cyclical" lender for the first time by giving ACSA a 15 year loan of € 85 million (including a 3-year grace period). The loan agreement was signed between the two parties February 25, 2009.
Objectives
This funding has made it possible for ACSA's long-term investment programme to be sustained.
Once completed, the programme:
- will promote the development of tourism and commerce as part of to a job creation action;
- will strengthen the role of South Africa's international airports in regional and intercontinental air traffic;
- will develop regional and international cooperation.
Project description
The project involves financing the extension and upgrade of the O.R. Tambo International Airport. The work undertaken includes:
· New central passenger terminal building;
· Reconfiguration and upgrade of the existing international terminal building;
· Additional structural car parking;
· Additional fuel tanks
· Runway and taxiways shoulders widening required for the Airbus A380, the latest jumbo airliner from Airbus.
The new terminal will allow a “Gautrain” station to be integrated within the airport complex. It will be operational for the FIFA World Cup in 2010. This mass rapid transit railway system, the construction and management of which have been assigned respectively to the French companies Bouygues Travaux Publics [Bouygues Public Works] and RATP Développement [RATP / Autonomous Operator of Parisian Transports], will link the airport to Sandton (business area) and later to Pretoria, the administrative capital of South Africa.
Impacts
The project makes a significant contribution towards the economic growth of the country and the sub-region by promoting the development of domestic and international air traffic and using the tourism market at both a national and regional level.
The South African tourism sector, which developed only very recently from 1 million tourists in 1990 to 7 million in 2005, contributes significantly to job creation, in both direct and indirect ways: one direct job is created for approximately every twelve new tourist arrivals in the country, and 1,100 new jobs are created in the year following the establishment of a new scheduled international airline route.
The upgrade and extension of O.R. Tambo International Airport in short contributes towards improved internal and external access, including humanitarian access, by ensuring territorial continuity, that is to say greater regional and global integration for South Africa.
Date and amount
Date of awarding the loan: December 18, 2008
Loan amount: ZAR 950 million (€ 85 million).