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Economy

Pattni duty-free company evicted from Nairobi airport

Business owners and workers rummage through goods that were dumped outside the Jomo Kenyatta International Airport in Nairobi on Thursday after the Kenya Airports Authority evicted Diplomatic Duty Free Company. Emma Nzioka
Business owners and workers rummage through goods that were dumped outside the Jomo Kenyatta International Airport in Nairobi on Thursday after the Kenya Airports Authority evicted Diplomatic Duty Free Company. Emma Nzioka  

The Kenya Airports Authority (KAA) on Monday swiftly moved to repossess duty -free shops owned by Goldenberg architect Kamlesh Pattni’s company, Diplomatic Duty Free Limited, following the expiry of the lease on July 21.

KAA’s move followed a Monday evening court order by Justice Jonathan Havelock stopping the parastatal from repossessing the shops pending hearing and determination of a suit filed by Mr Pattni on Wednesday.

Airport officials, who did not want to be quoted commenting on the controversial matter, claimed KAA had not been served with the order by the time they started evicting the tenants shortly after midnight on Wednesday.

Tenants claimed a group of 300 youth kept them off the premises as they threw their merchandise out. The litigious Mr Pattni had rushed to court to block KAA from entering into a lease agreement with any other company, citing the indefinite lease entered with the government back in 1991 that gave him lifetime control of the premises.

In February, KAA had notified Diplomatic Duty Free of its intention to repossess space from the company to give way for renovation and construction work at the Jomo Kenyatta International Airport (JKIA), once the lease expired at the end of July.

‘’The lease agreement that Kamlesh Pattni had entered with Kenya Airports Authority expired on Wednesday night and I think the management decided to take over from its former occupants.

They had asked for a discussion but the KAA turned down the request since they want to decongest the airport terminals ’’ said a highly placed source at KAA who sought anonymity. KAA has been struggling to upgrade the current airport facility and upgrade the shops to international standards.

In a bid to ease congestion at JKIA, the authority cleared a couple of stores, a move that offered a small relief for passengers going through the airport.

In a signed affidavit presented in court Abhimanyu Garwal, a director of Diplomatic Duty Free, said the company was required to surrender its passenger duty free lounge at terminal 1 on the grounds that some airlines were complaining.

“It transpired at the meeting this was a ploy on the part of the respondent (KAA), which in truth wished to lease the lounge to Kenya Airways Ltd,” he said. Pattni, through his firm, claimed KAA was favouring Kenya Airways by insisting to renew the firms lease for one year on a smaller space as opposed to the six-year automatic renewal, as provided in the 2007 contract.

The shops attendants who spoke to the Business Daily said the incident caught them unawares as they had not been informed about the eviction notice.

"Yesterday we had received an electronic container with goods worth Sh20 million and we were expecting another container today, we are frustrated and no one is responding to our concerns,’’ one of the shop attendants said.

The traders were in confusion on Thursday as the taxman could pounce on them if they opted to move the untaxed goods from the airport’s customs bonded area. They, however, shipped the stuff out of the airport in minibuses claiming they would store it at an undisclosed location awaiting direction from Mr Pattni.

The controversial businessman, who prefers to be called Pastor Paul after converting to Christianity, could not be reached for comment as his phone was switched off.

JKIA’ security safety manager Eric Kiraithe said he was not in a position to comment about the repossession but confirmed that the owner’s lease had expired, claiming he had subsequently opted to vacate the premises.

"I don’t manage corporate communication for KAA, but I oversee security management. I hear  the occupants’ lease expired and they decided to  move out,’’ said Mr Kiraithe.

Allan Shimoli, JKIA police boss, said he was not aware of the operation and hence could not comment on the incident.

Earlier Mr Pattni had taken KAA to court over the advertisement of an international tender for the development and management of duty-free retail master concessionaire. He argued that he held the rights to run all duty free shops in the country including for future airports.

This is the latest court battle between KAA and firms associated with Mr Pattni – including World Duty free – which was awarded Sh4.2 billion for breach of an airport deal that the authority is fighting.

World Duty Free alleges KAA terminated a contract that gave it exclusive rights to run shops at JKIA. Mr Pattni has also challenged the move by the authority to advertise for the development and management of duty free retail master concessionaire for the new terminal 4.

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