The government has placed 22 demands on Adani Holdings before it can proceed with the takeover of Jomo Kenyatta International Airport (JKIA), one of East Africa's busiest airports.
National Treasury Cabinet Secretary John Mbadi confirmed these conditions in a heated Senate session, revealing the challenges faced by Adani in securing approval for the $1.85 billion about Ksh260 billion revamp of the ageing airport infrastructure.
Among the most significant conditions is the requirement for Adani to absorb all current JKIA staff, a move aimed at safeguarding local jobs. Mbadi, appearing before the Senate Roads and Transport Committee, further explained that the Public Private Partnership (PPP) committee, which oversees the process, will not approve if the firm fails to meet these conditions.
Why it matters: The project remains in limbo pending a comprehensive review despite a ticking time clock on the deal.
According to the government, the deal should be concluded by November, and the Adani’s have a clause that could see them sue Kenya if the government botches the deal.
Dig deeper: Mbadi found himself in a tough spot, facing scrutiny from Senators over the selection process. Kisii Senator Richard Onyonka questioned whether other firms had been given a fair shot.
Onyonka tabled letters from two other companies—India’s GMR and the American-based Nexus Logic—both of which had shown interest in the project. He pressed Mbadi on why Adani was given preferential treatment, especially given what he believes to be Indian Prime Minister Narendra Modi’s 58 per cent stake in the Adani empire.
Senators raised concerns over Adani’s grip on Kenyan infrastructure, with Onyonka suggesting that the conglomerate was positioning itself to dominate various sectors of the Kenyan economy. Mbadi was unable to provide clear answers, admitting that he was unaware of the extent of Adani’s involvement in Kenya.
The controversy surrounding Adani’s bid deepened as Nairobi Senator Edwin Sifuna highlighted the irregularities in the submission process. He pointed out that the proposal came from the Transport Ministry rather than the Kenya Airports Authority, as is customary. This raised questions about whether Adani had bypassed standard procedures, a claim that Mbadi attempted to downplay.
The PPP committee, chaired by Kiambu Senator Karungo Thang'wa, demanded that any agreement must ensure full transparency, particularly through open-book accounting. This would guarantee that the government has full access to the financial records of the project, ensuring accountability in revenue sharing.
Mounting Opposition: The legal battles surrounding the project further complicate matters. A High Court ruling has temporarily halted the deal following a petition from the Law Society of Kenya (LSK) and the Kenya Human Rights Commission (KHRC).
The petition argues that Kenya can raise the necessary funds for airport improvements without entering a multi-decade lease with Adani. Protesters have also voiced their opposition, fearing that the takeover would benefit foreign investors at the expense of local interests.
Mbadi assured the Senate that the Kenya Airports Authority, alongside a technical team from the National Treasury, is conducting a rigorous due diligence process. This will include stakeholder engagement to address concerns from airport workers and other local entities. The review will ensure that Adani has the financial and technical capacity to carry out the proposed upgrades.
One of the key requirements from the PPP committee is that the project should not lead to an immediate increase in charges for airport services. Mbadi emphasised that any future hike in fees would need to follow the proper regulatory process. The committee also demanded that the cargo business at JKIA be clearly defined within the agreement and that local content provisions be adhered to, ensuring that Kenyan suppliers benefit from the project.
Senators, however, remain sceptical. Busia Senator Okiya Omtatah questioned the role of PPP Director General Christopher Kirigua, who was recently appointed as Deputy Head of Mission at the Kenyan Embassy in Washington, DC. Omtatah insinuated that Kirigua’s involvement in the deal might be influenced by external interests.
Nairobi’s Edwin Sifuna took a harder stance, accusing government officials of acting as gatekeepers for Adani rather than advocating for Kenyan interests. He challenged Mbadi to ensure that the PPP process remains transparent and free from undue influence, a sentiment echoed by several other Senators.
