Suspended Infrastructure secretary Michael Kamau said the agreement between KAA and Dufry International was worse than the 1989 contract given to businessman Kamlesh Pattni. PHOTO | FILE
The Ministry of Infrastructure was not informed of last year’s agreement between the Kenya Airports Authority (KAA) and Dufry International for the 25-year concessioning of duty-free shops, suspended Infrastructure secretary Michael Kamau has said.
The agreement was worse than the 1989 contract given to businessman Kamlesh Pattni, Mr Kamau said, adding that it gave Dufry the right to operate retail areas even in temporary airport terminals. Mr Pattni’s contract was terminated in August, 2014.
Mr Kamau and his principal secretary Nduva Muli, who was also suspended pending conclusion of corruption allegations, revealed that the KAA board was not informed of the drafting and execution of the concession agreement that was awarded to Dufry International.
Mr Muli told the Public Investment Committee (PIC) that the agreement gave the concessionaire exclusive rights to manage, lease and sublet all duty-free shops in the country.
Clauses
He questioned five clauses in the agreement, one of which granted the concessionaire the right to develop and operate retail areas in the event of temporary facilities or terminals created for the handling of international departing or arriving passengers.
Mr Muli said the concession was only awarded to Dufry to operate duty-free shops in the new Terminal 1A and not the second terminal that is currently under construction or the new project.
“In the event that the authority further develops terminal facilities other than the Terminal 1A, the concessionaire shall be granted priority over the concessions within such facilities, upon terms and conditions substantially similar to this agreement with due adjustments of rates,” the agreement read.
Mr Kamau told the committee that he summoned the suspended KAA managing director Lucy Mbugua and the tender committee members who awarded the contract to correct the mess.
“I am sorry for micro-managing KAA. I summoned them to the PS’s office where we asked them what they had done in the concession agreement, we intervened to have that agreement corrected,” he said.
Mr Muli said he had raised the matter with the board after he realised the KAA management was keeping it secret.
The World Duty Free company has moved to court to seek Sh7 billion compensation claim against the KAA for forcible eviction from the airport
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