High Court suspends JKIA-Adani deal

The High Court has suspended the proposed 30-year lease of Jomo Kenyatta International Airport (JKIA) by the Indian multinational conglomerate, Adani Group.

The deal, initially announced in March 2024, was intended to allow control of JKIA by the Adani Group for three decades.

By June, the government had approved the relevant aviation policies, effectively setting the stage for Adani's planned expansion of the airport.

The Indian conglomerate, led by billionaire Gautam Adani, was set to invest more than Sh230 billion in upgrading and managing the airport.

Furthermore, Adani would retain an 18 per cent equity stake in JKIA's aeronautical business indefinitely, entitling the company to a concession fee starting at Sh6 billion, with a 10 per cent increase every five years. 

The agreement was celebrated by the government as a strategic move to boost the country’s infrastructure and economic prospects, particularly in light of the country’s ambitious plans to enhance its aviation sector.

However, the deal sparked public outrage over lack of transparency, the long-term implications of the lease, and its potential consequences. 

Opposition to the agreement grew, with airport workers demanding the plan be scrapped.

However, the government is determined to push the deal forward.

The opposition to the lease deal culminated in a lawsuit filed by a coalition of civil society organizations including the Kenya Human Rights Commission (KHRC) and the Law Society of Kenya.

"In July 2024, applicants learned, from whistleblower accounts, about an ongoing plan to illegally sell Jomo Kenyatta International Airport, a profitable and strategic national asset built in 1978, to Adani and its subsidiaries—without value for money, at immense risk, and for an unaffordable cost to the taxpayer," petitioners state in their court papers.

On July 23, 2024, and August 1, 2024, KHRC and LSK sent letters to JKIA seeking details on the opaque contract.

Despite rising public demand for transparency, the government continued to withhold information about the deal. 

The petitioners argued that the lease agreement was marred by procedural irregularities and lacked adequate public consultation.

They also raised concerns about the potential loss of national sovereignty over a critical infrastructure asset and the long-term financial implications for the country.

Through lawyer Dudley Ochiel, they argued that the government can independently secure the estimated $1.85 billion or Sh238 billion needed to expand JKIA, negating the need for a long-term lease.

They believe that the lease proposal is financially burdensome, could lead to job losses, and does not provide good value for taxpayer money.

The petitioners argue that the lease of a strategic and profitable JKIA to a private entity is irrational and in violation of Article 47 of the Constitution, on fair administrative action.

The applicants assert that the proposal contravenes principles of good governance, accountability, transparency, and the prudent use of public resources as outlined in Articles 10 and 201 of the Constitution.

High Court Judge John Chigiti, after reviewing the application filed by the petitioners under certificate of urgency, determined that there were substantial grounds to question the validity of the lease process. 

"Leave is granted to operate as a stay or conservatory order prohibiting any person from implementing or further implementing or acting on the privately initiated proposal for development and operation of JKIA by Adani Airport Holdings Ltd pending the hearing and determination of this application by the court," Justice Chigiti ordered.

The court also granted the LSK and KHRC leave to file a judicial review over the proposal to lease JKIA.

Judicial review refers to the authority of the courts to examine the actions of the legislative, executive, and various administrative arms of the government and to determine whether such actions are consistent with the Constitution.

“The Applicant shall file and serve the substantive application within three days,” Justice Chigiti said in his ruling on September 9, 2024.

Chigiti granted Kenya Airports Authority, Airports Infrastructure PLC, GlobalAirports Operator, Adani Enterprises Limited, Kenya Aviation Workers Union, and Transport Workers Union who are listed as respondents five days to file their pleadings to the lawsuit.

The matter shall be mentioned on October 8, 2024.