Air operators have opposed the plan to lease Jomo Kenyatta International Airport (JKIA) to India’s Adani Group, joining a growing list of critics of the deal shrouded in secrecy.
Through their lobby, the Kenya Association of Air Operators (KAAO), the operators maintained that leasing out JKIA to Adani Airports Holdings Limited (AAHL) should be done through competitive bidding given its strategic importance.
KAAO became the latest lobby to oppose the plan after the Law Society of Kenya (LSK) and the Kenya Human Rights Commission (KHRC), which successfully obtained a court order suspending the deal pending the hearing of a legal challenge.
The plan to lease JKIA to AAHL— a subsidiary of Adani Group— flew into headwinds after a whistleblower lifted the lid on the deal in July.
“The board in its deliberations noted that it does not support the concession of JKIA as currently conceived, noting further that the stakes are too high for a one-bidder process for such a strategic asset and that the credibility of the potential partner is also in question,” KAAO said on Tuesday.
Kenya Airports Authority (KAA) secretly cleared AAHL to take over JKIA, before a court order slammed the brakes on the plan.
The Indian firm's approval came in 17 days, even as KAA sat on another proposal from an Argentinian firm, the Corporación América Airports SA.
Besides the process in which the deal with Adani was inked, the Indian firm is also the subject of lawsuits in its home country over bribery allegations and question marks over its books.
The concession to AAHL would see the Indian firm spend $1.85 billion (Sh238 billion) to upgrade and expand JKIA and operate it for 30 years, after which it would transfer the facility back to KAA.
But KAA and Adani will have to agree on the value at which the facility will be transferred, with a guaranteed internal rate of return on equity of 18 percent.
Experts have also questioned the rationale behind the deal compared to Rwanda and Ethiopia, both of whom are building new airports without handing over operations of the facilities to the investors.
Airport workers have also opposed the deal amid fears that they would lose their jobs upon expiry of a two-year period in which AAHL said that it would absorb the current employees.
KAAO demanded that all firms interested in the JKIA lease deal be allowed to bid competitively.
