Adani says they paid Ksh.6.5M review fee to Gov’t for JKIA lease proposal

Adani Airport Holdings Limited says it paid a $50,000 (about Ksh.6.47 million) review fee to the Kenyan government for its $1.85 billion (Ksh.242 billion) proposal to take over and facelift the Jomo Kenyatta International Airport (JKIA) in Nairobi.

In new court filings seen by Citizen Digital, the Indian infrastructure company owned by the Adani Group says it deposited the money to the Public Private Partnerships Facilitation Fund, alongside submitting the relevant documents for its controversial privately initiated proposal (PIP) to the Kenyan government.

“Upon submission of the PIP, the 5th respondent (Adani Airport Holdings Limited) duly paid a review fee of USD 50,000 to the Public Private Partnership Facilitation Fund as required by the law,” the company submits through its lawyers.

“The 5th respondent also provided all the necessary pre-approval documents including incorporation and corporate documents, tax compliance documents and financial documents to aid the PPP (Public Private Partnership) Directorate, in coordination with KAA, to carry out their due diligence on the proponent.”

The company says this in a Tuesday, September 17 replying affidavit to the case lodged by the Kenya Human Rights Commission (KHRC) and the Law Society of Kenya (LSK) on September 9, blocking the deal.

Adani says the Kenya Airports Authority wrote back on March 18 confirming receipt of the PIP, indicating that it had “cleared the project to proceed to the project development phase, that is, the feasibility study phase.”

The company says it then provided a feasibility study report outlining “the environmental and social impact of the project”, the financial plan and “how the Kenyan public will get value for money from the PIP project.”

Adani “also provided a preliminary operating plan for the project and the report confirmed that the project is aligned with the national infrastructure priorities and is aimed at curbing the perennial infrastructure flaws and deterioration that has been witnessed at JKIA,” reads court papers.

The Indian company holds that the project is still at the review and due-diligence stage, dismissing statements by KHRC and LSK that JKIA has already been leased for 30 years as a misrepresentation of facts.

LSK and KHRC argue in their submissions Kenya's busiest airport was leased to a foreign private entity without adequate consultation or transparency.

According to the Public Private Partnerships Act, a contracting authority may consider a privately initiated proposal if: the project is aligned with national infrastructure and priorities and meets a demonstrated societal need; it provides value for money; it provides sufficient information for the contracting authority to assess fiscal affordability and the potential contingent liability implications of the proposal.

The project must be able to be delivered at a fair market price; supported by all required documents and support the efficient transfer of risk from the public sector.

The contracting authority shall submit the privately-initiated proposal to the Directorate of Public Private Partnerships for assessment and approval.

The Cabinet Secretary may, by notice in the Gazette, prescribe when submissions may be made.

Additionally, the private party is required to pay into the Public Private Partnership Facilitation Fund a non-refundable review fee at the time of submitting its proposal, calculated at the rate of 0.5 per cent of the estimated project cost, or $50,000, whichever is lower.

“The review fee paid… shall not create any obligation on the contracting authority or the Directorate towards the proponent,” the law states.

The Cabinet Secretary shall, in consultation with the Directorate, make regulations for the better implementation of this section.”

In Tuesday’s court filings, Adani says it learnt of the deteriorating condition of JKIA through Kenyan media and sought to invest in the airport's improvement, submitting a proposal on March 1, 2024, to KAA.

Former Transport Cabinet Secretary Kipchumba Murkomen in November last year alluded to JKIA’s facelift, although he did not give definite figures on how much the project would cost.

Murkomen at the time said the government wanted to upgrade JKIA – the main gateway into Kenya and the busiest airport in East Africa – to be at par with its world’s top counterparts.

But KAA acting CEO Henry Ogoye previously said Adani’s deal requires significant capital investment the government cannot afford due to current fiscal constraints.

The court on September 9 halted all further action on the proposed lease of JKIA to Adani until the case was fully resolved.