JKIA expansion could take 50 years, Kenya Airports Authority tells MPs

The Kenya Airports Authority (KAA) has informed Members of Parliament that it will take up to 50 years to generate the Sh200 billion needed for the expansion of Jomo Kenyatta International Airport (JKIA).

This was revealed on Tuesday during a session with the National Assembly's Committee on Implementation, where Transport Principal Secretary Mohamed Daghar spoke about the financial hurdles facing the airport.

A tourist sits beside Pharaonic statues displayed at the Grand Staircase of the Grand Egyptian Museum during a partial trial in Giza, Egypt on October 15, 2024. (Photo: REUTERS/Mohamed Abd El Ghany)

Daghar explained that KAA currently generates a net revenue of Sh4 billion each year.

"We have no fiscal space to invest this kind of money," he told MPs.

The PS noted that while Adani Airports Holdings Limited is proposing to invest $1.85 billion over a 30-year concession, the financial constraints mean that upgrading JKIA's facilities will take five decades.

Currently, JKIA is handling 8.2 million passengers annually, exceeding its designed capacity of 7.6 million.

"The government is 10 years late in upgrading facilities at JKIA," Daghar stressed the urgency of the situation.

He also highlighted past setbacks, including a fire incident in 2014 and the cancellation of the Greenfield Terminal project, which have contributed to the airport's current congestion.

Concession fees

Adani Airports Holdings is prepared to invest the necessary funds over time without requiring immediate government payment.

Transport CS Davis Chirchir when he appeared before the Senate standing committee on Roads, Transport, and Housing over the concessioning JKIA to Adani Group on September 13, 2024. (Photo: X/Davis Chirchir)

"Adani will also pay concession fees to the contracting authority (KAA) over the 30 years even as they recoup their investments," Daghar added.

The PS's remarks followed inquiries from Embakasi West MP Mark Mwenje, who sought clarification on whether the Adani deal would benefit Kenya Airways or open JKIA to increased competition from Indian and Asian airlines.

Daghar appeared before the committee alongside Kenya Airways Chief Executive Alan Kilavuka and KAA Acting Managing Director Henry Ogoye to discuss the implementation status of the House resolution on the nationalisation of Kenya Airways.

The proposed lease of JKIA to Adani has faced challenges, particularly after a whistleblower raised concerns about the deal in July 2024.

A court has since paused the process, which had been approved in just 17 days, while KAA had delayed consideration of another proposal from Argentina's Corporation América Airports SA, which is embroiled in bribery allegations.

Under the agreement, Adani would upgrade and manage JKIA for 30 years, after which the facility would be returned to KAA.

The terms include negotiating the facility's transfer value, with a guaranteed internal rate of return on equity set at 18 per cent.

Experts have criticised the rationale behind this deal, contrasting it with Rwanda and Ethiopia, which are building new airports without relinquishing control to investors.

Additionally, airport workers have voiced opposition to the lease, expressing concerns about job security after Adani's initial commitment to retain current employees for two years.

They argue that the lease of JKIA should go through a competitive bidding process due to its strategic significance.