Adani Airport Holdings Limited (AAHL), an Indian-based company, has proposed a significant investment to expand and manage Jomo Kenyatta International Airport (JKIA) in Nairobi.
If approved, AAHL will determine and collect fees for all services at the airport.
The proposal, which has sparked controversy, suggests that AAHL will invest US$1.84 billion in the airport’s development.
According to a leaked contract seen by Kahawa Tungu, the company would have the exclusive right to set and collect fees through USD for both aeronautical and non-aeronautical services at JKIA.
“Concessionaire to have the sole and exclusive right to determine, demand, collect, retain, and appropriate fees from the users for all services including the aeronautical services and non-aeronautical services in USD,” the proposal reads in part.
The deal, detailed in the March 2024 proposal, includes a request for an 18 percent annual return on investment.
Under the proposed concession agreement, AAHL would finance, build, and operate the expanded facilities for 30 years, after which they would receive an equity stake in perpetuity.
AAHL’s proposal outlines plans to invest US$750 million in constructing a new terminal building, along with a new apron, taxiway system, and two rapid exit taxiways to enhance airport efficiency.
An additional US$92 million will be allocated to improving the existing taxiway network, including new rapid exits and remote aircraft parking stands by 2035.
Furthermore, the company aims to invest US$620 million in integrating new facilities with existing infrastructure.
Employment Concerns
The proposal comes after a feasibility study by ALG, a Spanish consulting firm, recommended a public tender for the airport expansion.
However, AAHL argues that a competitive bidding process could delay the project’s start and impact its outcomes.
The company’s proposal includes provisions to employ non-Kenyan staff, which could be controversial given recent assurances by Kenya Airports Authority (KAA) Managing Director Henry Ogoye about job security for local employees.
The leak of AAHL’s proposal has led to public concerns and debates about government transparency and accountability.
While planned protests did not materialize as expected, the discussion has intensified around the potential deal.
The Kenya Airports Authority stated that the proposal is still in the early stages and will undergo thorough scrutiny, including stakeholder engagement, parliamentary review, and legal assessment.
Adani Airport Holdings is a subsidiary of the Adani Group, a large Indian conglomerate founded by Gautam Adani in 1988.
The group, which consists of 16 companies, has investments across various sectors including ports, food, real estate, infrastructure, sports, mining, and energy.
However, in 2023, the Adani Group faced scrutiny from Hindenburg Research, which accused the conglomerate of stock manipulation and accounting fraud.
By KT
