Kenya Airports Authority (KAA) and the government have been taken to court over contracts with an Indian company for a proposed $1.85 billion (Sh238 billion) concession to build a new passenger terminal and refurbish existing facilities at Jomo Kenyatta International Airport.
Mr Isaac Lango Gayo wants the proposed deal for Adani Airport Holdings Limited to be declared unconstitutional, arguing that the process was rushed and bypassed due process.
Under the deal, the Indian company will upgrade the airport, including building a second runway and a new passenger terminal under a 30-year build-operate-transfer (BOT) contract.
Mr. Jiu said he was concerned that proposals were being rushed through without adhering to established public-private partnership procedures, and that complex transactions required significant time for intensive consultation, comprehensive evaluation and careful negotiation.
“The court orders immediate cessation and nullification of all proceedings, agreements and activities relating to the PIP (Private Proposal) submitted by Adani Airport Holdings Limited to prevent any further violation of constitutional and legal procedures,” Mr. Gayo said.
High Court Judge Lawrence Mugambi has directed the High Court to hand over the case to the High Court and the other defendants within 14 days. The case will be mentioned on September 24 for directions.
Adani Airport Holdings Limited submitted the proposal to the Civil Aviation Authority on March 1, 2024.
Mr. Jiyo noted that the proposal includes a 30-year lease period during which Adani Airport Holdings, a subsidiary of the Adani Group, will be responsible for developing and operating the Johannesburg International Airport.
He said the deal could give Adani Group significant control over airport operations, including the power to set user fees, which could have negative implications for airlines and passengers.
Furthermore, the proposal was allegedly approved in a blanket manner and appeared to be heavily biased in favour of the proposer. Transaction advisor, ALG Global Infrastructure Advisors, highlighted these concerns, allegedly costing taxpayers Sh160 million.
The Civil Aviation Authority, the Treasury, the Public-Private Partnerships Unit and the Department for Transport have been appointed as respondents in the case.
He says concerns have also been raised about the Adani Group due to allegations and controversies it faces including share manipulation, improper accounting practices and misrepresentation in financial statements.
“The petitioner acknowledges that there are serious concerns beyond the treatment and the advocate and serious concerns about the process and how it was handled from the beginning,” he said.
Mr. Jiyu pointed out that KAA justified the proposal due to financial constraints, and therefore sought a private financing model.
He added, “The project obtained the necessary approvals and moved to the project development phase. This phase concluded with the approval of the National Treasury, which allowed it to purchase the project under the private investment program. After that, negotiations began, and what remains is to complete the project agreement.”
Mr. Jiu said that public-private partnership projects are often complex and take years to negotiate, but this project was accelerated in less than five months with only a few regulatory steps pending.
“The Attorney General has been following with great concern the developments and conduct of the defendants since the deal was leaked into the public domain. The defendants have remained largely silent, allowing speculation to build dangerously within the public domain,” he added.