A feasibility study report on the Jomo Kenyatta International Airport (JKIA) had recommended for competitive investment partnership bidding.
The feasibility report was undertaken by the Spanish consultancy firm ALG in February 2024. The report noted that Kenya would have the upper hand in maximizing the value for money through a competitive bidding procedure for any JKIA investment.
However, this did not happen. One month later, in March 2024, the Adani Group submitted its Privately Initiated Proposal (PIP), in which it pitched for a takeover of the JKIA for a period of 30 years.
The proposal by Adani has generated criticism due to some of the demands contained in the pitch. In one instance, Adani states that once the takeover deal comes into effect, Kenya shall be barred from building any new airports that can compete with the JKIA for a period of 30 years.
Air ticket prices to and from Kenya via JKIA to increase once Adani takes over
In addition to this, the government will be required to make changes to the Kenyan aviation laws and policies to safeguard Adani’s monopoly over the JKIA.
“No new competing facility will be constructed in proximity to JKIA by KAA or government instrumentality during the concession,” Adani states in its proposal. “In the case of the development of any existing competing facility through private investment, the concessionaire will have the right of first refusal.”
Adani has proposed to pay a concession fee of Sh. 6.4 billion a year to the government.
Adani says that this money will be raised from fees that the company will charge airport users. The higher costs of using the JKIA will be slapped on airlines, who are expected to then pass them onto passengers through costlier air ticket prices.
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.
