During a townhall meeting that was held in July in Mombasa, President William Ruto admitted that he was seeking to hand over the Jomo Kenyatta International Airport (JKIA) to private Indian firm Adani Airport Holdings.
The president further stated that the JKIA was lagging behind compared to airport developments in regional countries.
“The airport we have in Nairobi is made of canvas in the arrivals. This is a temporary structure we put up almost 7 years ago,” he said. He went on to state that Ethiopia and Rwanda have new airports and this was one of the main reasons why the JKIA needed the investment from Adani.
“Ethiopia, Rwanda have a brand-new airport. It is the reason why we need to work with investors to give us a new airport,” he said.
The airport deal that has been proposed by Adani Airport Holdings, a company that is under the Adani Group, is radically different from what is happening in both Ethiopia and Rwanda.
In fact, a spot check on the aviation developments in both Rwanda and Ethiopia show that the JKIA Adani deal is nowhere near the development deals in the two countries. For a start, unlike Kenya that is handing over the operations of the JKIA to a foreign company in exchange for a promise of investment, Ethiopia and Rwanda are getting brand new airports built from scratch.
Let us start with Rwanda. In 2019, the Government of Rwanda and Qatar Airways agreed on a partnership for the development of a brand new international airport 25 kilometers southeast of Kigali, in the Bugesera District, Rwanda.
This partnership agreement included arrangements for a build, own, and operate model for the new airport. Qatar Airways agreed to take a 60 per cent stake in the project that was valued at around USD1.3 billion (Sh. 169 billion at USD to Kenya Shilling exchange rate of 130) at the time. Currently, the project could consume up to USD2 billion (Sh. 260 billion).
When complete, the new airport would accommodate seven million passengers per year. This would be enhanced in a second phase in which passenger capacity would be expanded to 14 million from around 2032.
Although the construction of this project was delayed, Rwanda expects that the new international airport could open sometime between 2027 and 2028.
“Construction is already in progress. We’re about to finalize the horizontal works and move to the vertical. We’re looking at 2027 and 2028 in terms of the airport being operational,” RwandAir CEO Yvonne Manzi Makolo said in a Bloomberg interview in May 2024.
“There has been a bit of delay due to redesign. Initially, it was a much smaller airport but when Qatar came in there was a whole redesign process.” In addition to this partnership, Qatar Airways is looking at taking 49 per cent of RwandaAir.
Let us now look at Ethiopia. The Ethiopian Airlines Group which owns the Ethiopian Airlines is planning a brand new airport that will be capable of serving 100 million passengers annually when all phases of the construction are completed.
This new airport will be located in Bishoftu, some 40 kilometres outside of Addis Ababa. It is expected to be linked to the city by a planned passenger rail system.
The new airport will be constructed in three phases at a total estimated cost of USD4 billion (Sh. 520 billion). The first phase, which is expected to be completed by 2028, will include two terminals. The master plan for the new airport and the site selection were done by the French engineering and design company Groupe ADP.
The location for the new airport is said to be favourable for takeoffs as it is lower than Addis’ Bole. The location is around 1,900 meters above sea level while Addis is at 2,400 meters above sea level. This high elevation is cited as one of the primary reasons why Ethiopian Airlines makes mandatory stops in Dubai or Italy on its long-haul flights to North America.
The new airport will cover an area of 35 square kilometres and will enhance capacity on the current main airport Bole International Airport which has a passenger capacity of 19 million annually. In the its full year ended in June 2024, Ethiopian Airlines alone carried 17 million passengers.
In the two cases, neither Rwanda nor Ethiopia chose to hand over the running of its existing airports for ‘improvement’ to a privately sourced firm. Whereas the two cases are bound to involve a level of foreign investment as is with Rwanda and Qatar Airways, the terms have been in the public for a while now.
Enter Kenya. The Adani Group’s Adani Airport Holdings, claims the Kenya Airports Authority (KAA), privately proposed in early 2024 to takeover the JKIA. Adani claims that it will invest USD1.85 (Sh. 240.5 billion) to ‘expand’ and upgrade the airport.
USD750 million (Sh. 97.5 billion) will be used to develop a new passenger terminal, a taxiway system, two rapid exit taxiways, and an associated apron. These will be completed by the year 2029, Adani claims.
USD92 million (Sh. 11.9 billion) will be used to improve the taxiway network system, develop two additional rapid exits, and develop remote aircraft parking stands. These will be completed in 2035, Adani claims.
This will be done under a Build-Operate-Transfer (BOT) model for a period of thirty years. Within this 30 year period, Adani will be expected to earn at least an 18 per cent annual turnover in US dollars.
Over the 30-year duration of this contract, Kenya will not be allowed to construct any new airports that can rival the JKIA, or any airport that shall be deemed to be in close proximity with the JKIA.
“No new competing facility will be constructed in proximity to JKIA by authority or government instrumentality during the concession… In the case of the development of any existing competing facility through private investment, the concessionaire will have the right of first refusal,” the proposal states.
During the 30-year period, Adani will be entitled to determine and impose charges in US dollars on airlines and other users for services at Kenya’s main airport. “[Adani will] be free to determine to determine and collect charges for non-aeronautical and any other commercial activities without any restrictions,” the company states in its submissions.
Employees currently working at the JKIA who are employed by the KAA will be asked to renegotiate their work contracts with the Indian firm once the takeover is completed.
These employees will be forced to accept new terms and conditions as one basis for any rehiring that might take place. According to the proposed concession terms by Adani, not all employees will be rehired. The firm proposes that it will only absorb a portion of the current workforce.
READ MORE: Indian firm to ‘ban’ Kenya from building any other airport for 30yrs after JKIA takeover
The firm has also states that it will bring in foreign workers as part of its new workforce. These foreign workers, it is expected, will replace Kenyans who will be released by the firm.
“[Adani] shall offer employment to a mutually agreed percentage of present KAA employees on terms and conditions as recorded in the concession agreement… [Adani] may employ non-Kenyan employees,” part of the proposal by the firm states.
The Indian firm has also declared that Kenya will bear the burden of losses alone regardless of cause, including where the takeover deal is abandoned midway. It further declares that an additional runway will not required until the end of the concession period in 2054.
“The existing litigations in respect to the land at JKIA to be the responsibility of the Kenyan government… Government to remain fully responsible for any existing issues/disputes or arising pursuant to the award concession, with any of the above stakeholders holders (Kenyans included) in relation to JKIA,” Adani states in its proposal.
Upon JKIA takeover, Adani will have the sole and exclusive right to determine, invoice, collect, retain, and appropriate fees from users for all services in US dollars. The Indian firm adds that it may also repatriate any of its earnings to countries outside Kenya, subject to the payment of concession fees to the authority.
This private proposal by Adani had been kept secret by the government through the KAA. The KAA only admitted about it after it was leaked to the public.
In justifying the proposal, KAA claimed that the airport was built in 1978 and has aging infrastructure that is a threat to Kenya’s regional competitiveness. “KAA received an investment proposal under the Public Private Partnership Act 2021… [for] an investment in a new passenger terminal building, second runway, and refurbishment of the existing facilities at [the airport],” said KAA.
The justifications presented by the KAA, the admission by President Ruto, and the deployment of government bloggers on X (formerly Twitter) to suggest a determination to handover the JKIA to this Indian firm; a determination that leaves a lot to be desired; a determination that leaves a bad whiff that once again, Kenya might get a bad, and unwanted deal that has been negotiated privately and forced through the throats.
Yet, the Jomo Kenyatta International Airport is a premium -to-die for asset that that in an open and transparent call out for investors would attract prime and respected global investors at far better and more dignified terms.
