Gov't to conduct due diligence probe into Adani's JKIA bid

• The government will conduct a thorough due diligence investigation into the Privately Initiated Proposal (PIP) submitted by Adani Airports Holdings Limited for the expansion and modernisation of Jomo Kenyatta International Airport (JKIA
• The investigation will assess value for money, financial viability, technical and functional viability, and safeguarding of national interests
• The government has clarified that no terms have been agreed upon as yet, and all negotiations will be conducted in accordance with the Public-Private Partnerships (PPPs) Act

The government has announced that it will conduct a thorough due diligence investigation into the Privately Initiated Proposal (PIP) submitted by Adani Airports Holdings Limited for the expansion and modernisation of Jomo Kenyatta International Airport (JKIA).

The process will include a comprehensive investigation, a thorough assessment of value for money, financial viability, technical and functional viability, and the safeguarding of national interests.

The government has also clarified that no terms have been agreed upon as yet, emphasising that all negotiations will be conducted in accordance with the Public-Private Partnerships (PPPs) Act.

The announcement comes as the government seeks to address growing concerns over the proposed deal, which has sparked a heated debate among Kenyans.

Some of the concerns include the status of employees who are likely to be affected if Adani Holdings is granted authority to operate the airport.

The government has also faced criticism for its handling of the process, with some accusing it of lack of transparency.

In a full-page advertisement published in the Daily Nation on Tuesday, the government outlined its position on the proposed PPP, stating that JKIA is a strategic national asset that is not for sale.

The government also emphasised its commitment to job security and compliance with Kenyan labour laws.

Mordernisation of JKIA

The government has been exploring options to modernise JKIA, which has been plagued by infrastructure challenges, including leaking roofs, power outages, inadequate aircraft parking bays, outdated passenger terminals, and baggage handling systems.

The airport has also been criticised for its limited shopping and dining options, and inadequate lounge facilities.

The proposed expansion and modernisation of JKIA is estimated to cost $2 billion (Sh260 billion), a sum that the government is constrained to fund due to the current tight fiscal situation.

The government has therefore been seeking to partner with the private sector to finance the project.

Under the PPP Act, private investors are allowed to submit PIPs to invest in national infrastructure priority projects. The proposal is currently undergoing the requisite due process, reviews, and negotiations in compliance with the PPP Act.

READ: JKIA Sh246 billion deal: 7 airports managed by proposed investor Adani Airports

The government has assured the public that the proposed expansion and modernisation of JKIA will be conducted in strict adherence to the Constitution and the PPP Act.

The government has also emphasised that all international obligations and regulations, including those with the International Civil Aviation Organization (ICAO), will be adhered to.

The government has further stated that JKIA will be modeled on international best practices to be a top-tier world-class airport.

The envisaged goal of upgrading and expanding JKIA is to transform it into a modern, competitive, and efficient hub for air transport and trade, fostering economic growth and solidifying Kenya's strategic position as a regional and continental leader, as well as a multilateral, logistics, and financial hub.

The government has urged the public to remain patient as the due diligence process is conducted. The government has also assured the public that it will keep the public informed of the progress of the negotiations.

Key Points

• The government will conduct a due diligence investigation into the Adani JKIA bid.
• No terms have been agreed upon as yet.
• The government has emphasized that JKIA is a strategic national asset that is not for sale.
• The government is committed to job security and compliance with Kenyan labor laws.
• The proposed expansion and modernization of JKIA is estimated to cost US$2 billion.
• The government is seeking to partner with the private sector to finance the project.
• The government has assured the public that the proposed expansion and modernization of JKIA will be conducted in strict adherence to the Constitution and the PPP Act.

Additional Information

• The Public-Private Partnerships Act, 2021 is the legal framework pursuant to which PPP arrangements are conducted in Kenya.
• Kenya's public debt as a percentage of GDP has risen to 69.7% (Sh11.2tn) from 46% in 2010.
• The proposed expansion of JKIA is expected to increase passenger throughput to 30.5 million in the next 30 years.