The government has tried to clarify ongoing negotiations that would see a private investor, a subsidiary of Indian conglomerate Adani Group, make significant investments in the Jomo Kenyatta International Airport (JKIA).
- •In a statement, the Kenya Airports Authority (KAA) has stated that Adani Airport Holdings Ltd. proposed to invest in a new terminal, second runway, and refurbishments of facilities at the airport.
- •It added that it was still scrutinising the proposal before it is subjected to stakeholder engagement and approval by Parliament and the Attorney General.
- •The clarification follows weeks of speculation that the deal, which would see Adani get a concession fee for 30 years and an equity stake in perpetuity, was negotiated in bad faith.
“The attendant investment requirement is significant and cannot be funded with the prevailing fiscal constraints without recourse to private funding,” Henry Ogoye, the Acting Managing Director/CEO of KAA said in a statement on Wednesday July 24th.
Earlier in the week, Prime Cabinet Secretary Musalia Mudavadi, in his capacity as acting CS for Treasury, told a Parliamentary committee that the government had not sold the airport.
“Let me discount immediately that the JKIA is not on sale. This is a public asset, a strategic asset, and if it was going to be sold, it would be after a full public process that parliament endorses,” Mudavadi told the Budget and Appropriations Committee.
“One of our long-term strategies is to create Nairobi as a logistics hub and we are talking with the UN offices in Nairobi, so that so that they can use this destination Kenya as a logistical hub for their operations just the way there is a logistics hub in Italy,” Mudavadi said.
Why it Matters
A leak of the proposed investment deal by a Kenyan in the diaspora that showed that the proposal would see Adani Enterprises, which operates airports elsewhere, get a 30-year concession and 18% stake in perpetuity, triggered uproar that culminated in OccupyJKIA protests online and offline.
Protesters had pledged to occupy JKIA on Tuesday, demanding full disclosure of any deals forged between the KAA and Adani enterprises. The inquiry on whether such a deal exists was heightened by Kisii senator Richard Onyonka, calling on the authority to account for the reports. In addition to questions about who the deal favours, there have been questions about the opacity of the negotiations, as well as whether sufficient due diligence was done on the suitability of the private investor.
There have been plans to build a new terminal and improve the JKIA’s facilities for more than a decade. A KShs 55bn Greenfield terminal that was launched in 2015 was expected to increase the airport’s passenger capacity by 20 million but it did not take off.
During the long rains last year to the short rains this year, the country was exposed to the leaking roofs of some of the airport’s terminals despite costing the taxpayers KSh 175 million, based on a report by the Auditor General.
Musalia also revealed plans for the government to brand Kenya as a major logistics hub for international players operating in Africa. This will involve the creation of operation centers in Nairobi, Mombasa, and Nakuru – with the JKIA being a crucial element in this plan, therefore, it is unlikely it would be sold.
Anticipating massive protests on Tuesday June 23rd, KAA and Kenya Airways issued notices to passengers wishing to travel through JKIA. They were asked to report early enough due to heightened security checks and prepare for any disruptions that might occur.
The police warned protesters against demonstrating at the airport, citing that it a protected area and the government deployed both police and military to the facility.
