In 2019, I wrote an opinion piece in Business Daily titled “Why the KQ/KAA Deal Is Unconvincing.”
Kenya Airways (KQ), which was on the verge of bankruptcy, was to acquire the assets and operations of the Kenya Airports Authority (KAA) with the aim of using the authority’s cash flows to fund the revival and growth of the national airline.
But the proposal failed to explain the benefits of the deal for Kenya, and how ownership of a vital strategic public asset would be protected.
Similarly, what is not clearly stated in the proposed deal to sell the assets of Jomo Kenyatta International Airport to the Adani Group for 30 years is the overriding justification.
Are we looking to address the funding or inadequate management of airports? And why is this urgently needed now?
Following the 2013 Jomo Kenyatta International Airport fire, the Jubilee Government significantly upgraded and expanded the airport, adding significant value to the infrastructure originally built and commissioned by the Jomo Kenyatta government in 1978.
The Jubilee upgrade may be part of the debt we continue to pay off, but the consolation is that Johannesburg International Airport remains a public asset that will serve current and future generations. Will the Adani deal cover the debt costs of this project?
As I understand it, the new runway is a major project pending at Johannesburg International Airport, which I remember was awarded a contract and then cancelled.
If financing the runway is the main challenge, can the government postpone the project until it has the capacity to finance it? There is no urgent need to do everything now.
I believe that the additional escape alone is capable of attracting funding from multiple lenders due to its added strategic value.
Yes, roof leaks and power outages are management issues caused by neglect of preventive maintenance. Airport management expertise can be sought locally or from abroad.
Specifically, the KAA Board of Directors must be fit for purpose and challenge.
We are familiar with direct PPP projects such as the Nairobi Expressway where investors built new infrastructure from scratch using their own capital, recovering costs and returns on investment.
Kigali Airport is also currently under development, owned by Qatar Airways (60%) and the Government of Rwanda. Qatar Airways is wholly owned by the Qatari Government, ensuring a sovereign guarantee for the project.
Transferring ownership of JKIA’s existing assets to a foreign private company without any sovereign guarantees poses a significant risk to Kenya. Furthermore, it is a moral injustice to Kenyan taxpayers who funded the existing assets.
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