Chapter 2 Background on the Aerotropolis
2.4 African aerotropolis experiences
According to Kasarda (2013b), Africa has four airport cities: four developing “aerotropoli”.
One is in Nigeria (northwest of Minna) and another is Egypt’s Cairo International Airport. Two are in South Africa, where in the past five years both Ekurhuleni’s Oliver Tambo International Airport (ORTIA) and Durban’s King Shaka International Airport (KSIA) have aligned their Metropolitan Spatial Development Frameworks with the aerotropolis concept. While Africa may have been later than other places in embracing the aerotropolis concept, the continent has progressed beyond initial difficulties in the development of these commercial, airport-oriented cities (CAPA, 2014a).
According to the former Chief Executive Officer of Dube TradePort in Durban, South Africa (CAPA, 2014b), Africa has been lagging behind in both aviation and airport city developments, and a further concern is that Europe may have overlooked opportunities in Africa generally, and more specifically those which have to do with better international and intercontinental connectivity, given its prospects for those kinds of developments.
32 Estimates by some economists see Africa as having grown to be the world’s next major destination for business and tourism, thereby offering opportunities for the creation of regional and international travel hubs. However, issues of safety, security and transportation costs are still problematic and remain a priority for aviation professionals in Africa (CAPA, 2014b).
Furthermore, the continent as a whole is not doing well in investments in infrastructure development and its air transportation has thus been subject to criticism. Concerns have been raised about lack of investment, lack of a proper strategic vision, and tactical mismanagement, leading to decaying infrastructure, outdated equipment and unsafe systems on the ground (CAPA, 2014b). This confirms Africa’s need for assistance from international funders.
Strong growth in air traffic over the past years has provided stimulus for investment in airport infrastructure in some parts of Africa with passenger traffic recorded at 163 million passenger journeys, increased African airline profitability, increased aircraft movements and anticipated annual average growth of 6% over a five year period (CAPA, 2014b).
Even with positives like the growth in airport megacities such as Lagos and Johannesburg and the significance of Airports Company South Africa (ACSA) as a reputable operator and investor in South Africa and abroad, Africa still accounts for only 2,85% of global air passengers in spite of being the second largest and second most populous continent (CAPA, 2014b). It remains the case that the disadvantages outweigh the advantages in the eyes of investors, who have been reluctant to invest in the continent because of inadequate infrastructure, exorbitant passenger charges (partly caused by fuel taxes), failure of airline privatisation and a lagging aviation industry (CAPA, 2014b).
Four African aerotropoli are discussed below: Cairo International Airport, Minna Airport City in Nigeria, Ekurhuleni’s O. R. Tambo Aerotropolis in Johannesburg and the Durban Aerotropolis.
2.4.1 Cairo International Airport
According to EHAF Consulting (2016), the World Bank lent 280 million dollars to the government of Egypt to finance extension of Terminal Building Two at Cairo International Airport as part of the Cairo Airport Development project to prepare for transitioning into an airport city. An assessment was undertaken of the potential for Cairo Airport areas to develop a business with a commercial real-estate development focus; this, in combination with planned
33 investment in Cairo Airport’s own needs, will lead to the preparation of a development strategy and a strategic masterplan for Cairo Airport City (EHAF, 2016).
Although the airport’s website has not been updated to indicate what progress has been made on the terminal upgrade (Cairo Airport, 2017), it is said that the intention is for Cairo International Airport to become the gateway to Africa and the Middle East as well as a regional hub for millions of visitors coming to Egypt. Thus far, the airport has a hotel and a cargo ‘city’.
According to Worldfolio (2015), the aerotropolis is expected to provide about 30 000 direct jobs and 90 000 indirect jobs. Confidence has been expressed that Egypt will maintain its position as the leading aviation hub in Africa (Worldfolio, 2015). Volume of investments is expected to reach 80 billion pounds and revenues from the project to reach 422 billion pounds by 2040. Egypt’s Minister of Civil Aviation is hopeful that the project will be a huge success because they have plans to start with a business centre, then an entertainment park like Disney World. Additionally, there will be game courts, a water park, 18 cinemas and several restaurants (CAPA, 2014b).
2.4.2 Minna Airport City, Nigeria
In Nigeria, the idea of the aerotropolis was proposed by Princess Stella Oduah who was Minister of Aviation. She projected the creation of 10 million jobs and generation of 100 billion nairas per annum for airport-centred commercial activity, with potential to transform the economy and living standards of rural farmers through cargo exports and manufacturing free trade zones (Williams, 2015). The envisaged airport cities are in Lagos, Abuja, Port Harcourt and Kano. Having attracted over 400 million dollars investment across all four cities, the government stakeholders are expecting these cities to rank alongside the likes of Dubai (Williams, 2015).
There are concerns however that the country may not be sufficiently prepared for the establishment of the aerotropolis because of existing security and power-supply concerns.
Clashes between the terrorist group Boko Haram and the Nigerian army may hinder any plans for the Abuja Aerotropolis (Williams, 2015). Furthermore, questions remain as to whether existing laws and regulations are sufficient to support an airport city; migration policy, for example, may need to be reworked to support the huge influx of people expected after the completion of projects. According to Shogbesan and Monye (n.d.), the airport city development plans have been criticised by Nigerians as just another opportunity to waste public funds, and
34 Shogbesan and Monye comment that “despite the viable economic potentials of the aerotropolis, the motives of the initiators are questionable”.
From the two cases discussed above, it is clear that both airport cities are still in the process of being developed and are facing a number of constraints. O. R. Tambo Aerotropolis and Durban Aerotropolis in South Africa are discussed in the next section.
2.4.3 The South African aerotropolis experience
These two cases considered here are relatively new, with the Ekurhuleni Aerotropolis and the Durban Aerotropolis both having been established in 2014.
2.4.3.1 Ekurhuleni O. R. Tambo Aerotropolis
O. R. Tambo International Airport is situated in the City of Ekurhuleni in Gauteng province. It being one of the largest and busiest airports in Africa, the decision was made by government to transform O. R. Tambo in line with changing global requirements. An opportunity was identified to develop an aerotropolis which would centre commercial activity on O. R. Tambo (Ekurhuleni Municipality, 2017). In 2014, the contract to develop the Ekurhuleni O. R. Tambo Aerotropolis was awarded to a consortium led by the Aurecon consultancy firm, with the added advantage of extensive experience working on planning and infrastructure projects in the Ekurhuleni locality (Boshoff, 2014). In November 2015, the City of Ekurhuleni unveiled the Aerotropolis Masterplan to the local and international business community, intended to guide the airport city development objectives (Ekurhuleni Municipality, 2017).
2.4.3.2 Durban Aerotropolis
The Durban Aerotropolis, which is the case of reference for this study, is described by the Dube TradePort Corporation (2017b) as a hub of trade and business in Africa, “about to become South Africa’s new gateway to the Southern African region”. This initiative has attracted the direct and indirect involvement of various stakeholders, ranging from provincial and local government structures to organised business in the private sector. The aerotropolis has, as its base, the Dube TradePort and the King Shaka International Airport. With its state-of-the-art infrastructure, the aerotropolis is represents significant government investment in public–
35 private partnership for positioning the region as a key business and investment space (Dube TradePort Corporation, 2017b).
What sets the Durban Aerotropolis apart, according to Dube TradePort Corporation (2017b), is that it is a freight-oriented development, with a purpose-built, world-class cargo facility, and incorporating a ‘greenfield’ site. In addition, its coastal location improves the potential for cost- effective logistics. The proposed airport city component, the Dube TradePort together with the existing seaport infrastructure in Durban harbour, facilitates access to numerous global destinations and linkages to countries within the Southern African Development Community region, and it positions KZN as a key business point in the country (Dube TradePort Corporation, 2017b).
Both O. R. Tambo and the Durban Aerotropolis are in their developmental phases, which is an additional reason for the exploration in this study of the implications for RED in relation to aspects such as conceptualisation of the region, governance dynamics, agglomeration and clustering, and regional marketing, as further discussed in Chapters 6 to 9.