Air operators warn against hasty JKIA lease to Adani, criticise bidding process

The board of the Kenya Association of Air Operators (KAAO) has expressed concerns that the bidding process for the Public-Private Partnership (PPP) related to the $1.85 billion (approximately Sh239 billion) takeover of the Jomo Kenyatta International Airport (JKIA) by Adani Holdings did not meet the required criteria and violated the provisions outlined in the PPP Act.

In a statement released on Wednesday, KAAO said the stakes involved in the takeover are too high and that a competitive bidding process should have been employed to secure an appropriate investor.

“The board further opined that a clear vision of the end game for Kenya needed to be articulated, starting with adherence to the principles laid out in the National Aviation Policy and a well-developed JKIA master plan, which should form the business case for a concession process,” the association said.

KAAO argued that ensuring a transparent process is vital for maximising JKIA's potential as a world-class aviation hub and enhancing its status as a competitive player in the region.

They also highlighted the lack of prior stakeholder engagement concerning the takeover before approving Adani Holdings.

Currently, the court has halted all actions related to the proposed lease of JKIA to Adani until a case filed by the Kenya Human Rights Commission (KHRC) and the Law Society of Kenya (LSK) on September 9 is resolved.

KHRC and LSK argue that JKIA is a strategic and profitable national asset that should not be leased without thorough scrutiny and public consultation.

Involvement and consent

Aviation workers previously staged a shutdown strike on September 11, leading to an agreement that the workers would have veto power over the Adani deal, ensuring that no agreements would be finalised without their involvement and consent.

On Tuesday, the High Court announced that it would decide whether a petition challenging the plans to lease the airport to Adani Group should be heard by a three-judge bench.

Justice John Chigiti stated that the application for a bench hearing should take precedence before any further determinations are made.

"I am of the view that the issue of formation of a bench should come first. Should a bench be set up, it shall be able and in a position to rest its mind on all the issues conclusively," Justice Chigiti said.

The judge directed the involved parties to file and exchange their responses to the application and supporting submissions before his ruling on October 25.

In addition to the JKIA deal, Adani Holdings is engaged in a separate Sh94 billion project with the Kenya Electricity Transmission Company Limited, which involves the construction of 422 kilometres of power transmission lines across the country.

Adani Group has opposed the case in the High Court, asserting that the dispute should be resolved by the Public-Private Partnership Petition Committee.

The company said Section 75(1) of the Public Private Partnerships Act establishes this petition committee with the authority to hear and determine any petitions regarding decisions made by the Public Private Partnership Committee, the Directorate of Public Private Partnerships, or any contracting authority.

“The applicants have failed to exhaust the dispute resolution mechanism stipulated in the law. This court, therefore, lacks jurisdiction to hear and determine this matter,” Adani Enterprises Ltd said.

The Indian conglomerate further argued that the case was premature, as it sought to halt a project that is still in the due diligence stage.