Kenya Sets Tough Terms for Adani's Controversial JKIA Takeover

24, Sep 2024 / 2 min read/ By Livenow Africa

The Kenyan government has set 22 stringent conditions that Adani Holdings must meet before proceeding with its $1.85 billion (approx. Ksh260 billion) takeover of Jomo Kenyatta International Airport (JKIA), East Africa's busiest airport.

During a heated Senate session, Treasury Cabinet Secretary John Mbadi outlined the challenges Adani faces in securing approval for the revamp. One of the key requirements is the absorption of all current JKIA staff, aimed at preserving local jobs. Mbadi explained that the Public Private Partnership (PPP) committee overseeing the process would not approve the deal if these conditions are unmet.

Project Delays and Legal Battles
Despite a looming deadline in November, the project remains in limbo due to ongoing reviews and growing opposition. 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), arguing that Kenya can fund the airport's improvements without entering into a multi-decade lease with Adani.

Senators also raised concerns over the selection process. Kisii Senator Richard Onyonka presented documents showing that other firms, such as India's GMR and U.S.-based Nexus Logic, had expressed interest in the project. He questioned why Adani received preferential treatment and hinted at possible political influence, citing Indian Prime Minister Narendra Modi's stake in the Adani Group.

Transparency and Accountability Demands
Nairobi Senator Edwin Sifuna voiced concerns over irregularities in the submission process, noting that the proposal came from the Ministry of Transport instead of the Kenya Airports Authority (KAA), raising suspicion that Adani may have bypassed normal procedures.

The PPP committee, chaired by Senator Karungo Thang'wa, emphasized the need for full transparency, including open-book accounting, to ensure the government has access to financial records and proper revenue-sharing mechanisms. Additionally, the project must guarantee that no immediate increase in airport service charges occurs, and that local suppliers benefit from the agreement.

Mounting Opposition
Opposition to the deal continues to mount, with public protests and growing concerns that the takeover would disproportionately benefit foreign investors at the expense of local interests. Senators like Busia's Okiya Omtatah and Nairobi's Edwin Sifuna accused the government of favoring Adani, with Sifuna demanding a transparent process that prioritizes Kenyan interests.

Mbadi reassured the Senate that the Kenya Airports Authority and a technical team from the National Treasury are conducting rigorous due diligence, including engaging stakeholders to address concerns from workers and local entities. He also noted that Adani must demonstrate both financial and technical capability before moving forward.

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