Kenyan legislators have halted Kenya Airways plans to run the country’s largest airport through a takeover deal. During a session with official of Kenya Airport Authority, members of parliament in the Public Investment Committee demanded to know:
- Who initiated the takeover deal;
- Why they awarded the transactions advisor(s) a contract worth KSh150 million through restricted tendering;
- KQ’s ability to run Jomo Kenyatta International Airport…
Kenya Airways officially asked to be allowed to operate JKIA on December 2018, in order to weather financial turbulences.
The takeover deal meant to boost KQ’s operations would have seen the national carrier run the country’s main airport for a period of 30 years.
It has emerged that KAA pushed on with the takeover deal even after its lawyers advised against the move. Kenya Airways, which has been pursuing the takeover, has not made a profit since 2012. This is despite numerous efforts to revive the air carrier.
MPs have questioned the airline’s ability to successfully operate the largest airport in the country given its poor financial performance in the past six years.
Legislators also raised concerns of possible conflict of interest for KAA’s chair Isaac Awuondo who is also the chief executive at Commercial Bank of Africa. The bank is associated with President Uhuru Kenyatta, and is owed Ksh3.1 billion by Kenya Airways.
Kenyan Aviation workers joined in the opposition of the merger deal. The workers went to court claiming that the deal was being rushed and it was against their interest.
In February, the airport workers’ lobby group suspended the strike to pave way for ‘further deliberations’
PIC members have advised KAA to halt the takeover process and to stop payments to the transactions advisor. The legislators asked the auditor general to conduct forensic audit on the contract to establish the real motive for the merger. MPs also instructed KAA to present to them all documents related to the transaction.