Mbadi: Kenya’s 22 conditions to Adani on JKIA deal
The National Treasury has set 22 conditions, including the mandatory absorption of all JKIA employees, before the Adani Airports Holdings deal can receive approval, according to Cabinet Secretary John Mbadi.
Speaking to the Senate Committee on Roads, Transportation, and Housing, Mbadi clarified that the Public Private Partnership (PPP) Committee would not clear Adani’s proposal until all conditions are fulfilled.
“The National Treasury will not greenlight the project Development Agreement for Jomo Kenyatta International Airport (JKIA) unless Adani Holdings meets the 22 stipulated conditions,” Mbadi stated.
“The process will remain on hold until Adani Airports Holdings complies with all conditions,” he emphasized.
The PPP Committee, led by Treasury Principal Secretary Chris Kiptoo, instructed the Kenya Airports Authority (KAA) to prioritize onboarding JKIA staff to Adani on favorable terms and to give Kenyan nationals preference in recruitment.
Mbadi informed the committee, chaired by Kiambu Senator Karungo Thang’wa, that Adani’s PIP was approved following an assessment by the PPP Committee.
“The PPP Directorate has not approved any step of Adani Airport Holdings’ PIP without clearance from the PPP Committee,” Mbadi noted.
“All approvals were based on Technical Working Papers that evaluated the project and recommended actions to the Committee.”
Additionally, the PPP Committee required KAA to engage stakeholders and conduct due diligence on Adani Airport Holdings, as per Section 27 of the PPP Act, before finalizing the Concession Agreement.
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Any significant alterations to the agreement terms must be referred to the PPP Committee for approval. KAA is expected to secure legal clearance of the Concession Agreement, following Section 60(2) of the PPP Act.
The PPP Committee also mandated the inclusion of key clauses in the Concession Agreement, such as provisions for open book accounting to ensure performance transparency and full disclosure during audits.
The committee stressed the importance of reviewing the risk matrix to ensure all risks are clearly identified, allocated and mitigated effectively.
Furthermore, the Treasury required the Capex schedule and development plan for the terminal’s refurbishment to be explicitly defined.
The agreement drafting must ensure the concessionaire is motivated to achieve revenue and EBITDA targets without immediately increasing aeronautical and non-aeronautical charges. Any future increases should follow due process.
The cargo business must also be well integrated into the concession, and local content must be prioritized by Section 83 of the PPP Act, 2021.
The PPP Committee, led by Dr. Kiptoo, also directed KAA to seek guidance from the PPP Directorate on specific issues.
Mbadi informed the committee that due diligence on Adani Airports Holdings was paused due to an ongoing court case.
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The Law Society of Kenya (LSK) and the Kenya Human Rights Commission (KHRC) filed a High Court petition, arguing that the estimated $1.85 billion (Sh238 billion) needed for the airport revamp could be raised without a long-term leasing contract.
KAA supported Adani’s proposal to invest in a new terminal and runway, which they said was necessary to update the “aging infrastructure” of East Africa’s busiest airport, handling over 6.6 million travelers annually.
The proposed takeover by India’s leading private airport operator sparked protests in Kenya when announced in July, with demonstrators attempting to block the airport in protest.
The Kenyan aviation workers’ union also opposed the plan, citing concerns over potential job losses and the hiring of foreign workers.
Mbadi: Kenya’s 22 conditions to Adani on JKIA deal
