The substantive hearing will decide whether the lease agreement, which has raised concerns about national sovereignty and job security, can be continued or terminated entirely. The case is scheduled for further mention on October 8, 2024.
The order now tosses the deal into unwanted territory and given Adani’s recent international controversies, the Indian firm is going to need a miracle to overcome this one in its bid to modernize JKIA.
Adani has committed to a Ksh238 billion investment to upgrade and expand the airport. However, critics, including KHRC argue that Kenya could raise the necessary funds independently without giving up control of this critical national asset.
KHRC Executive Director Davis Malombe criticised the deal as “unaffordable,” highlighting potential job losses and significant fiscal risks to the public. The deal, he contended, offers no value for money to taxpayers.
The lease agreement stipulates that after 30 years, Adani would retain an 18 per cent equity stake in JKIA’s aeronautical business indefinitely. This would entitle the company to a concession fee starting at Sh6 billion, with a 10 per cent increase every five years.
KHRC argued that this arrangement violates Article 201(c) of the Constitution, which mandates that the benefits and burdens of resource use be shared equitably across generations.
Adani Enterprises recently set up a Kenyan subsidiary while raising its chances of taking over JKIA higher, despite intense opposition from aviation workers who went the extra mile of staging protests, demanding that the controversial deal be done away with.
The Kenyan subsidiary was set up by an Abu Dhabi group called Global Airports Operator, itself a subsidiary of Adani Enterprises, which was expected to own 100 percent of AIP’s share capital. As part of the incorporation of the Kenyan company, Adani issued a share capital of Ksh6.75 million, consisting of 6,750 shares at Ksh1,000 each.
These developments came a day after sentiments by businessman and veteran hotelier, Mohammed Hersi on X hinted at more dire consequences that include Kenya being unable to build or expand other airports across the country, impeding the country’s Vision 2030.
Aerial view of the Jomo Kenyatta International Airport (JKIA) in Nairobi. /FILE