Adani Airport Holdings Limited (AAHL), an Indian company, has proposed a USD 1.8 billion investment to expand and operate Jomo Kenyatta International Airport (JKIA), according to the Kenya Airport Authority’s confirmation last week following a leak that ignited widespread controversy.
The proposal involves a concession agreement with an expected 18.0% annual return on investment if accepted. The government would grant Adani the concession to finance, build, and operate the project for 30 years, granting the company an equity stake indefinitely.
Adani plans to invest USD 750.0 million in a new terminal, apron, taxiway system, and rapid exit taxiways to enhance efficiency. An additional USD 92.0 million is allocated to improve the taxiway network, establish two more rapid exits, 90-degree taxiway connections at both ends of the runway, remote aircraft parking stands, and other facilities by 2035. Another USD 620.0 million will go toward developing new facilities to integrate seamlessly with existing infrastructure.
In February 2024, ALG, a Spanish consulting firm, conducted a feasibility study and advised the state to issue a public tender for JKIA’s expansion. However, Adani Airport Holdings, a subsidiary of the Indian conglomerate Adani Group, proceeded with a privately initiated proposal.
“Procuring the proposed project using a competitive bidding method may impede achieving the desired outcomes within the set timelines due to the extended procurement process, coupled with contractual and delayed project commencement timelines associated with competitive bidding,” Adani stated in the March 2024 proposal.
Adani does not plan to invest in a second runway immediately, proposing to revisit this decision after optimizing the current runway’s efficiency.
The proposal also includes a provision allowing Adani to employ non-Kenyans under its terms, which could trigger controversy as it contradicts a July 24th statement by KAA Managing Director, Henry Ogoye, assuring staff of job security.
The leak of the proposal raised public fears of a secret deal, leading to protests in Nairobi’s Central Business District (CBD). The Kenya Airports Authority clarified that the proposal is still in its initial stages and will undergo stakeholder engagement and scrutiny by both Parliament and the Attorney General. “The attendant investment requirement is significant and cannot be funded with the prevailing fiscal constraints without recourse to private funding,” stated Henry Ogoye, Acting Managing Director/CEO of KAA.
Public scrutiny has also focused on Adani Airport Holdings, part of the Adani Group founded by Gautam Adani in 1988. The conglomerate spans ports, food, real estate, infrastructure, sports, mining, and energy. In 2023, Hindenburg, a New York-based short-seller research company, released a report alleging organized stock manipulation and accounting fraud by Adani group firms.
