Kenya has cancelled plans for a new terminal building at Nairobi's Jomo Kenyatta airport due to financial pressures and excess capacity caused by recent upgrades to existing facilities reports Reuters.

President Uhuru Kenyatta launched the USD$650 million terminal project for the airport in December 2013.

China's Anhui Construction and China National Aero-Technology had been selected to build the terminal, which was expected to handle 20 million passengers a year.

The first phase of the new terminal had originally been due to be completed this year, although construction has not yet started.

New terminal facilities at JKIA over the past three years have increased its handling capacity to 7.5 million passengers a year, against demand of 6.5 million last year, KAA said.

JKIA, which serves as an aviation hub in the region, opened in 1978 with an annual passenger capacity of 2.5 million.

Further upgrading of the existing passenger and cargo handling facilities will continue and eventually increase capacity to 10.5 million passengers, KAA said.