Chirchir defends Adani JKIA deal amid controversy

Davis Chirchir, nominee for the position of Roads and Transport CS before the Committee on Appointments at the Mini Chambers, County Hall, Nairobi. August 2nd,2024 [Elvis Ogina, Standard]

Kenya's Sh240 billion deal with Indian firm Adani Holdings over the expansion and takeover of the Jomo Kenyatta International Airport could be beneficial to the country, a Cabinet nominee has said.

Roads and Transport Cabinet Secretary nominee Davies Chirchir told a parliamentary committee vetting him that the country needed to assess the benefits of such a deal to the nation and potential investors.

"This is an off-balance sheet upgrade of the Kenya Airports Authority. If we can't do it as the government, can we allow a private sector player to do it at a reasonable or competitive cost and return on investment?" said the former Energy cabinet secretary.

Chirchir implied that the controversial deal might have been a victim of poor communication, arguing that more information ought to have been made public.

The Adani deal has attracted controversy amid claims that the government was "selling off" the JKIA, which prompted online protests by the youth, who threatened to occupy the airport to thwart the deal.

President William Ruto's government has contradicted itself on the planned deal, which the Head of State recently praised. The deal involves an upgrade of Kenya's flagship airport in an arrangement that will see the Indian firm manage the facility for 30 years.

"If we carried everyone along in public participation... we wouldn't be getting the challenges we have today," added the former CS.

Chirchir defended such public-private partnerships, which he said had made his former ministry successful, highlighting the electricity generation sector ran virtually privately.

He said he would pursue such arrangements to help Kenya Airways, hinting at bringing on board a supporting airline and investing in a viable fleet of aircraft that can handle KQ's passenger and cargo needs.

The prospective CS further touted a relook of perennial industrial challenges occasioned by the carrier's failure to honour pay terms for its staff.

"The reforms at KQ need a lot of communication and ownership by the KQ employees... we can't have others paying their lunch," said Chirchir, who also urged rethinking the open skies policy when KQ was still struggling.

He said he would push to have KQ's issues solved internally, vowing to build on what was working for the national carrier. 

"In the 2023 accounts, Kenya Airways had an operating profit of S10 billion. We need to look at what they are doing right and build on that," he said.

Chirchir, who valued his wealth at Sh509 million (an increase from Sh482 million in 2022), also hailed the government-to-government (G2G) oil importation deal. He said it had succeeded in addressing challenges occasioned by high inflation rates and a tight monetary policy.

"It was brought in to forestall the challenge of the unavailability of the US dollar in the industry... it worked very well," said Chirchir, highlighting the strengthening of the shilling against the dollar in recent months and resulted in dollar reserves worth over $3 billion.

His legacy in the Energy docket came under sharp focus, featuring concerns about frequent power blackouts and soaring electricity and fuel costs.

But Chirchir would argue that he had helped reduce the said costs, even as he blamed the power outages on inadequate allocations towards power transmission and the power supply that outdoes its demand.

"In July, the cost of electricity and petroleum products is the lowest in the last 15 months... We are working to deliver the lowest cost of electricity and petroleum, all private partnerships," he added.

Similarly, he would also highlight other successes, such as dealing with pending bills, despite claims of delays in paying independent power producers.

"We have no pending bills and the only one is a result of a court case," he told the Speaker Moses Wetang'ula-led committee.

He compared the number to the Sh166 billion pending bills at the Transport Ministry and the unfunded commitments worth Sh1 trillion, arguing that he would prioritise realistic commitments if confirmed to the docket.

His legacy, Chirchir added, also included the switching off of the Muhoroni and Kipevu One and Two power stations, which he said dispatched a combined 210 megawatts of power at Sh10 billion. Chirchir argued that keeping them operational would see the said cost double.