KAA gets final Sh1.47bn fire payout

April 9, 2014
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KAA has invited bids for a contractor to bring down the damaged international arrival terminal to pave way for its reconstruction, alongside the redesign for terminals I, II and III. Photo/FILE
KAA has invited bids for a contractor to bring down the damaged international arrival terminal to pave way for its reconstruction, alongside the redesign for terminals I, II and III. Photo/FILE

, NAIROBI, Kenya, Apr 9 – The Kenya Airports Authority (KAA) has received a final compensation of Sh1.47 billion from APA Insurance for the fire that gutted the international arrivals terminal at the Jomo Kenyatta International Airport (JKIA).

This brings the total compensation to Sh1.97 billion as the insurer presented Sh500 million in December.

Speaking during the cheque presentation ceremony on Wednesday, KAA Managing Director Lucy Mbugua said that full settlement of the claim by APA Insurance is a great boost to the recovery, rehabilitation and reconstruction of the facilities at JKIA.

“We are happy with that amount and we believe that the amount fully compensates us for the loss of the building, we spent a lot of money during the recovery and this will go a long way in helping us plug those holes that were created then,” She said.

She said that already, KAA has invited bids for a contractor to bring down the damaged international arrival terminal to pave way for its reconstruction, alongside the redesign for terminals I, II and III.

“Once the procurement process is through it will take a maximum of six months to bring down the building and then we will embark on the process of reconstructing that part of the airport,” she said.

She also said that the authority is in the process of shipping an interim terminal, besides finalising work on Terminal IV while construction of the Greenfield terminal, with a handling capacity for 20 million passengers has also kicked off.

The presentation of the final compensation cheque follows receipt of full documentation from the loss adjusters using independent data from specialist forensic experts, engineers and quantity surveyors to evaluate the claim.

Investigations into the cause of the fire concluded it was due to an electrical fault.

APA Insurance Chairman John Simba said the company settled claims of about Sh3.9 billion last year inclusive of the Sh500 million paid to KAA, while this year the insurance company has settled claims worth Sh2.25 billion so far inclusive of the Sh1.47 billion settlement.

“The fire at JKIA – the region’s critical airport hub – caused shockwaves around the world. We understood from the start that this would be a large and complicated claim and one we would need to act upon with all necessary speed. We are proud to have settled it with expediency and conclusively, working closely with our partners at KAA,” Simba said.

Simba said that this is the largest fire settlement in the country as well as the largest settlement the company has paid so far.

He said that given the broad reinsurance programme, APA’s balance sheet will remain strong despite the payment as it seeks to set a precedent in determining major losses experienced by their clients.

Its reinsurers that include Swiss Re, Africa Re, Kenya Re, Zep Re and East Africa Re contributed to paying the settlement.

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