All Kenya Airports Authority staff will continue to work on their current terms if India’s Adani Airports Holdings wins its bid to run Kenya’s largest airport for 30 years, signalling a softer stance after a workers’ standoff.
The revised master concession terms offered by Adani to Kenya Airways, under which it intends to spend $1.85 billion (Sh238 billion) to upgrade and expand the Jomo Kenyatta International Airport (JKIA), have shown that the company has now committed to absorbing all its existing workforce for two years before offering them new contracts.
This represents a departure from the initial proposal that Adani immediately forced KAA employees to renegotiate contracts and absorb only a certain percentage of them and release the others.
The partially amended terms read: “The Applicant (Adani) anticipates a time period of two years from the effective date of the Concession Agreement for the transfer of the operations of JKIA from the Authority (KAA) to the Concessionaire (Adani).”
“The franchisee shall make an offer to all employees of the Authority, on terms and conditions similar to their current terms of employment.”
Adani expects salaries and wages for existing KAA employees to rise steadily by around five percent, with a 10 percent increase at the start of the franchise and even see a “slight increase” in headcount initially.
However, Adani says, before the transition period ends, it will offer all current Johannesburg Airport employees an offer to transfer their jobs from the airport on new terms.
KAA’s latest annual report showed it had 1,801 employees at the end of June 2022.
According to the revised document, upon expiry of the two-year transition period, KAA employees who do not accept Adani’s offer of employment “will be relocated out of Johannesburg International Airport and redeployed by the Authority”.
Adani’s softened stance comes after weeks of confrontation with KAA employees, who staged several days of protests over what they called unfair proposals.
The Indian company had initially stated that it would offer employment opportunities to a “mutually agreed percentage” of KAA’s existing employees as per the terms and conditions set out in the concession agreement, and would also hire non-Kenyan employees on secondment or contract basis.
The initial proposal had alarmed KAA workers because it suggested potential job losses and a new, unknown pay structure.
Adani aims to generate $163 million (Sh21 billion) from JKIA in 2025 – its proposed first year of operation – which is more than the Sh13.3 billion that KAA generated from all its operations in the financial year ending June 2022.
The company wants to manage the airport for 30 years and then transfer it to Johannesburg International Airport for a mutually agreed value, but with a guaranteed internal rate of return on equity of 18%. The internal rate of return measures the profitability of an investment.