Kenya Airports Authority (KAA) and the government have been taken to court over engagements with an Indian firm for a proposed $1.85 billion (Sh238 billion) concession to construct a new passenger terminal and refurbish existing facilities at the Jomo Kenyatta International Airport.
Mr Issack Lango Guyo wants the proposed deal to Adani Airport Holdings Limited to be declared unconstitutional, arguing that the process has been rushed and has bypassed the required procedures.
In the deal, the Indian firm would upgrade the airport, including the construction of a second runway and a new passenger terminal under a 30-year-build-operate-transfer (BOT) contract.
Mr Guyo said he is apprehensive that the proposals are being expedited without adherence to the established procedures of Public Private Partnership (PPP), and that the intricate transactions require substantial time for compressive consultation, thorough evaluation and meticulous negotiations.
“That the court orders the immediate cessation and nullification of all proceedings, agreement and activities related to the said PIP (privately initiated proposal) by Adani Airport Holdings Limited to prevent any further infringement of constitutional and statutory proceedings,” Mr Guyo said.
High Court judge Lawrence Mugambi directed him to serve the KAA and other respondents within 14 days. The case will be mentioned on September 24 for directions.
Adani Airport Holdings Limited submitted the proposal to the KAA on March 1, 2024.
Mr Guyo pointed out that the proposal entails a 30-year lease term in which Adani Airport Holdings, a subsidiary of Adani Group, would assume responsibility for the development and operation of JKIA.
He said the deal could potentially confer significant control of airport operations to the Adani Group, including the authority to determine user fees, which could have consequential impacts on airlines and passengers.
Furthermore, he alleged that the proposal has apparently been approved holistically, and appears to be heavily skewed in favour of the proponent. These concerns were highlighted by the Transaction Advisor, ALG Global Infrastructure Advisors, who has cost taxpayers a sum of Sh160 million, he further claims.
He has named KAA, Treasury, Public Private Partnerships Unit (PPPU) and the Ministry of Transport as respondents in the case.
He says concerns have also been raised on the Adani Group over allegations and controversies it faces including stock manipulation, improper accounting practices and misrepresenting financial statements.
“The petitioner understands that there are serious concerns beyond the transaction and the proponent and serious concerns around the process and how it was handled from the start,” he said.
Mr Guyo pointed out that KAA justified the proposal because of financial constraints, and therefore sought the private funding model.
“The project received approvals and proceeded to the project development phase. This phase has since concluded with approval given by the National Treasury, clearing them to procure the project under PIP. Subsequently, negotiations have followed and what remains is finalisation of the project agreement,” he said.
Mr Guyo said public private partnership projects are often complex and take years to negotiate but this one has been fast-tracked in less than five months and only a few regulatory steps are pending.
“The petitioner has also watched with great concern the developments and the conduct of the respondents ever since the transaction leaked into the public domain. The respondents have largely remained silent, allowing speculation to build dangerously within the public domain,” he said.
