Lawyer petitions court to halt build and lease deal allowing foreign firm take over JKIA

The entrance to the Jomo Kenyatta International Airport.

By Joseph Ndunda
Tuesday, July 30, 2024

KAA had argued that they had obtained cabinet approval for the JKIA Medium Term Investments Plan covering the upgrade of the passenger terminal building, runway, taxiway and apron and due to fiscal constraints, private funding had to be sought.

A Nairobi lawyer has petitioned the high court to nullify the Privately Initiated Proposal (PIP) allowing foreign firm - Adani Airport Holdings to build the Jomo Kenyatta International Airport (JKIA) and operate it for 30 years in a Private-Public partnership deal.

The PIP proposes a Build, Operate and Transfer (BOT) arrangement for JKIA in a deal that will entail a 30-year- lease term during which Andani Holdings Limited would assume the responsibility for the development and operation of the airport for the period.

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Lawyer Issack Lango Guyo wants the high court to order immediate cessation and nullification of all proceedings, agreements and activities related to the said deal which the government has dismissed as fictitious.

Issack says the agreement allegedly initiated on March 1, 2024, was stated at $1.8 billion and he wants it stopped immediately.

He has sued the Kenya Airports Authority (KAA), the National Treasury Public Private Partnership Unit (PPPU) and the Ministry of Roads and Transport as the respondents, seeking orders to bar them from involving any agency in the management of JKIA.

"The petitioner prays that this court issues permanent injunctions restraining the respondents, either by themselves, their agents, or any other parties under their authority, from entering into or pursuing any future Public – Private – Partnership agreements or transactions related to JKIA or any other strategic national asset without full compliance with the constitutional principles of transparency, accountability and public participation," Issack states in suit papers.

The lawyer says that he comprehends the proposed deal could potentially confer significant control over the airport operations to the firm, including the authority to determine user fees, which could have a consequential impact on airlines and passengers.

Issack also states that the proposal raises numerous concerns at the transactional level, including the potential transfer of the title to Adani Group, the aggressively required Internal Rate of Return (IRR) of 18 per cent, the project hand-back mechanisms, the financing structure and implications.

He raises concerns over the proposal which he claims has been approved holistically, saying it appears to be heavily skewed in favour of the foreign firm.

"These concerns were highlighted by the Transactional Advisor, ALG Global Infrastructure Advisors, who has cost the taxpayer a sum of Sh160 million. Additionally, it is understood that the PPPU raised no less than 26 issues, which seem to have been conveniently ignored," Issack states in his petition.

"The petitioner also notes that senior officials within the government are involved in the fast-tracking of the transaction. It is not surprising that the 26 or so issues raised by the PPPU metaphorically went with the wind."

He wants the court to declare the entire transaction including the PIP by Andani Airport Holdings Limited and all attendant processes related to the same as unconstitutional for failing to adhere to the principles of transparency, accountability and public participation as enshrined in the constitution.

KAA had argued that they had obtained cabinet approval for the JKIA Medium Term Investments Plan covering the upgrade of the passenger terminal building, runway, taxiway and apron and due to fiscal constraints, private funding had to be sought.