India’s Adani Group got the green light for its proposal to manage the Jomo Kenyatta International Airport (JKIA) in a record 17 days as Kenya sat on a similar pitch by an Argentinian firm for months.
In documents filed in court, the Indian conglomerate said its privately initiated proposal (PIP) was sent to the Kenya Airports Authority (KAA) on March 1, 2024 and approved on March 28, 2024, allowing the firm to proceed with a feasibility study.
Approvals of projects of this magnitude, which involve multiple agencies and ministries, often take months.
Already, Argentinian firm Corporacion America Airports SA -- one of the world’s largest airport operators --expressed an interest in investing in Kenyan airfields three months ago and has yet to receive a response from the authorities.
The Buenos Aires-based company submitted a presentation letter to then Roads and Transport Secretary Kipchumba Murkomen in mid-June.
The High Court last week temporarily blocked the proposal to grant the Indian conglomerate owned by Gautam Adani, India’s second-richest man, a 30-year lease to operate JKIA.
The Law Society of Kenya (LSK) and the Kenya Human Rights Commission (KHRC), which filed a petition at the High Court, said the estimated $1.85 billion (Sh238 billion) needed to revamp the airport could be raised without a multi-decade leasing contract.
Adani yesterday hit back in court, terming the suit premature as it revealed the approvals the conglomerate has so far received from the State in the mega deal.
“In March 2024, Adani Airports Holdings originated a privately initiated proposal (PIP) dated March 1, 2024 and sent the same to the Kenya Airports Authority (KAA),” said Alok Patni, the head of Business Development at Adani Airports, in court papers.
“The 1st respondent (KAA) issued a letter dated 18th March 2024 confirming that the PIP had been received and cleared the project to the project development phase, that is, feasibility study phase.”
Ten days later, on March 28, the company provided the feasibility study on the upgrade of JKIA, the financial plan and how the Kenyan public will get value for money, the court documents show.
“Having considered the documents submitted, KAA is now engaged in negotiations on the next phase of the project,” said Mr Patni.
He added that its operating plan was aligned with Kenya’s national infrastructure priorities in turning JKIA into a world class facility.
The KAA said Adani’s proposal to refurbish the facility and invest in a new terminal and runway was needed to spruce up the “ageing infrastructure” at the largest airport in East Africa, which receives over 6.6 million travellers annually.
Through the law firm of Hamilton, Harrison and Mathews, Adani has also opposed the case being heard by the High Court, saying the dispute should be handled by the Public Private Partnership Petition Committee.
The Indian conglomerate said the cases opposing the deal are premature because they seek to stop a project that is still at the due diligence stage and is yet to be approved.
“The applicants (KHRC and LSK) have failed to exhaust the dispute resolution mechanism in the law and therefore, this court lacks jurisdiction to hear and determine this matter,” the Indian firm said.
“I confirm that the project is still at the review and due diligence stage and the averments by the applicants that the JKIA has since been leased for 30 years is premature and is an outright misrepresentation of facts.”
Adani reckons it will build a new passenger terminal, refurbish existing terminal buildings and provide modern amenities and facilities.
The firm also proposes to enhance the airside pavement works, including constructing new taxiways, rapid exit taxiways and aprons and other improvements necessary for modernisation of JKIA.
“Given the huge financing requirement to improve JKIA, the public-private partnerships can only provide the necessary capital infusion to expedite upgrades and rapid modernisation of infrastructure,” Mr Patni said.
The proposed takeover by India’s largest private airport operator sparked protests in Kenya when it was revealed in July, with the police blocking demonstrators who wanted to shut down the airport.
The Kenyan aviation workers’ union also opposed the plans, arguing they would lead to job cuts and the employment of foreigners.
The LSK says Kenya would surrender the operational and profitable JKIA to Adani for 30 years in exchange for Sh238 billion.
“Thus, the proposal would deprive the public of, and transfer to Adani, all the current revenues, receipts, expenditures and other financial transactions over JKIA. Although the project is dubbed a Build Operate Transfer, KAA would be handing over an existing and operational airport to Adani,” Mr Ochiel said.
He added that at the end of the 30 years, Adani would, in perpetuity, retain an 18 percent equity stake in the aeronautical business at JKIA.
“Thus, after 30 years, Adani would be entitled to an 18 percent concession fee starting at Sh6 billion and increasing by 10 percent every five years forever. In this way, the Adani proposal violates Article 201(c), demanding that the burden and benefits of using resources and public borrowing be shared equitably between present and future generations,” he said.
Adani has renewed its international expansion efforts, including a port deal in Tanzania this year, after damaging fraud allegations levelled at the company by US short seller Hindenburg Research, which the group has repeatedly denied.
The tycoon’s conglomerate has developed its businesses in tandem with infrastructure goals set by Indian Prime Minister Narendra Modi.
But Adani’s overseas deals have been criticised and faced setbacks. The group pulled out of Myanmar following its 2021 coup, while its ports and energy agreements in Sri Lanka and Bangladesh have fuelled local resentment.
