Adani denies claim that it will run JKIA for 30 years

Jomo Kenyatta International Airport in Nairobi. [File, Standard]

Indian firm Adani Airports Holdings Limited has dismissed claims that the Jomo Kenyatta International Airport (JKIA) will be leased for 30 years, saying the project is yet to be approved.

In a response filed at the High Court in Nairobi, the firm argued that cases challenging the controversial takeover are premature and that the airport improvement project is still at the due diligence stage, awaiting approval.

A lawsuit filed by the Kenya Human Rights Commission and the Law Society of Kenya, argues that the proposed takeover lacks transparency and could undermine national interests.

However, Alok Patni, representing Adani Airports, characterised the allegations as premature and based on inaccurate information. “I confirm that the project is still at the review and due diligence stage and the averments by the applicants that the JKIA has since been leased for 30 years is premature and an outright misrepresentation of facts,” he said.

Patni emphasized that the project is still under evaluation by the Kenya Airports Authority (KAA), where Adani has submitted a privately initiated proposal (PIP) dated March 1, 2024. He said the proposal aims to address urgent need for upgrades to JKIA, which has been marred by poor infrastructure.

In the petition, KHRC and LSK maintain that Kenya could independently raise the estimated $1.85 billion (Sh238 billion) needed for the airport’s expansion without leasing it. They say the Adani proposal threatens local jobs and fails to provide value for money.

LSK’s lawyer Dudley Ochiel, articulated concerns that leasing JKIA to Adani would transfer control and revenues from the operational airport to the firm for 30 years, with long-term financial implications for Kenyans. “Thus, the proposal would deprive the public of, and transfer to Adani, all the current revenues, receipts, expenditures and other financial transactions over JKIA. Although the project is dubbed a Built-Operate-Transfer, KAA would be handing over an existing and operational airport to Adani,” Ochiel said.

He added that after 30 years, Adani would, in perpetuity, retain an 18 per cent equity stake in aeronautical business at JKIA. “Thus, after 30 years, Adani would be entitled to an 18 percent concession fee starting at Sh6 billion and increasing by 10 percent every five years forever. In this way, the Adani proposal violates Article 201(c), demanding that the burden and benefits of using resources and public borrowing be shared equitably between present and future generations,” he said.

But Patni’s affidavit outlines Adani’s extensive experience in managing airport operations in India, where it oversees an integrated network of eight airports, including major hubs contributing to the nation’s economy.

He noted the intention is to transform JKIA into a world-class facility. The investors claim they developed an interest in investing in and improving JKIA following media reports from 2018 to 2023 on the deteriorating state of JKIA, referencing issues such as power outages, leaking roofs and inadequate passenger facilities. Adani also cites a news article showing unsuccessful works that had been done by local contractors to repair the roof, which had occasioned a loss of more than Sh175 million to Kenyan taxpayers.

“In light of the documented challenges facing JKIA, our interest in this project is not only business-driven but also aimed at enhancing the experience for passengers and improving operational efficiency,” Patni stated.

Adani says following the reports they initiated a privately initiated proposal and tendered to the government of Kenya on March 1, 2024. It then paid a review fee of $50,000 (Sh6,452,000) to the Public Private Partnership Facilitation Fund, complying with legal requirements.

Patni states in his affidavit that on March 18, 2024, KAA issued Adani with a letter confirming the PIP had been received and cleared the project to proceed to the development phase, then the feasibility study phase. In the proposal, Adani says it gave a detailed analysis of the project delivery plan, a justification for using the PIP method, value for money and affordability.

Adani said it proposed to construct a new passenger terminal, build and refurbish existing terminal buildings to increase passenger capacity and provide state-of-the-art amenities and facilities within the proposed and existing terminals.

The firm also proposed to enhance the airside pavement works, including constructing new taxiways, rapid exits taxiways and aprons, and also undertake other improvements as necessary for modernisation of the JKIA.

The Adani’s have asked the court to allow the PIP proceed through the various stages and have the matter by LSK struck out for want of jurisdiction.