MPs demand termination of any plans by Kenya Govt to lease JKIA to Adani of India

Members of Parliament have called for the termination of any plans by the government through Kenya Airports Authority (KAA) to lease Jomo Kenyatta International Airport (JKIA) to India’s Adani Holdings in a pact touted to involve the management and renovation. 

The legislators want the agreement cancelled before it is “too late,”  warning that it could harm Kenya’s future and questioned why the government opted for a Public Private Partnership (PPP) model instead of a competitive bidding process.

Baringo North MP Joseph Makilap expressed strong opposition to the deal, stating, “I know this is a bad deal for the country. We know that its involvement is an attempt to finance the impugned budget through other deals. Please let this deal die at the stage it is.”

He addressed these concerns to Treasury Cabinet Secretary John Mbadi, who appeared before the National Assembly Committee on Public Debt and Privatisation to defend the controversial arrangement.

Mbadi, however, maintained that the PPP agreement could offer significant benefits to the country, noting, “It is not within my mandate to terminate the deal; the process is well stipulated.”

He added that no final agreement had been signed between KAA and Adani, leaving room for other interested investors to submit bids.

“Any investor willing to bid for the same still has a chance,” he said.

The CS revealed that the process was still at the stakeholder engagement phase and that public participation had not yet been conducted due to a court order halting the proceedings.

He clarified that should a new company be identified, it would have to compensate Adani for the funds spent during the pre-qualification stage.

“The only thing is that the new company identified should compensate Adani the funds they have used at the pre-qualification stage so far,” he explained.

The committee members raised further concerns about the decision to use the PPP model.

Kitui MP Irene Kasalu questioned why the government didn’t pursue a concessional loan to finance the airport’s upgrade, suggesting that the PPP process was expensive and unnecessary.

“The Private Initiated Proposal (PIP) under the PPP is the worst since the country doesn’t have the time to do a feasibility report. Don’t you think this process is expensive, and we should borrow the concessional loan to upgrade JKIA?" she posed.

Mbadi responded that traditional financing sources had become scarce, making alternative funding methods necessary.

“We are spending Sh1.1 trillion yearly on debt servicing and Sh900 billion on salaries and very little if any on development. That is why we are exploring the PPP funding model," Mbadi said.

He strongly supported the PPP approach, stating, “That is why I support PPP with all my life. The only thing we need to do [is] ensure that there is no corruption in it.”

The CS also warned of the potential consequences of cancelling the deal prematurely, noting that failure to follow due process could deter future foreign direct investment (FDI).

“Due diligence is still being conducted on Adani. I have no evidence that Adani is involved in corruption. If they are, I will be the last person to stand and defend them. to what gain?” he told the committee.

In response to these concerns, MPs ordered a forensic audit into the deal between KAA and Adani Holdings.

The National Assembly’s Public Investments Committee on Commercial Affairs and Energy directed the Auditor General’s office to investigate the origins of the agreement.

“You should not do anything with Adani until this committee reports this matter to Parliament, you are so advised,” said Committee Chair David Pkosing.

Additionally, MPs have called for a review of the Sh239 billion project to verify the actual cost of refurbishing JKIA and assess the expenses involved in constructing a new terminal and runway.

The committee also expressed concern about Adani’s growing influence in various sectors of the Kenyan economy.

“How comes all of a sudden Adani is everywhere; SHIF, KETRACO… it is now becoming a big shareholder of Kenya,” Pkosing remarked, referencing the company’s involvement in projects such as the Kenya Electricity Transmission Company and its interest in Kenya’s new Social Health Insurance Fund.

The MPs are also worried about the fate of KAA employees, who have protested the deal, fearing for their job security.

Furthermore, the Law Society of Kenya (LSK) and the Kenya Human Rights Commission (KHRC) have filed a case opposing the lease, arguing that the process lacked transparency and public consultation. The case is set to be mentioned in court on October 8.

Meanwhile, Adani Holdings has denied claims that the airport has already been leased for 30 years, stating that it remains in the review and due diligence phase. The company also dismissed reports that the lease had been finalised as misrepresentations of fact.

CS Mbadi reiterated his commitment to a fair process, saying, “If Kenyans still think they want to discontinue the deal, who am I to say no? But let us allow for constructive engagement. If a better deal emerges, we can stop the Adani one, but the new developer will need to compensate Adani for their involvement.”