Kenya unable to fund Ksh.260B JKIA upgrade, no deal with Adani yet

In a statement on Monday, Mudavadi confirmed that the government is reviewing the proposal submitted by the Indian firm under the Public Private Partnership (PPP) in March 2024. 

The proposal involves upgrading JKIA which is set to cost Ksh.260 billion under a PPP which allows large-scale government projects to be completed with private funding. Through the agreement, private investors recover their funds once the project is complete over a period of time. 

Some of the renovations set to be done in JKIA include building a new passenger terminal, refurbishing the existing terminals, constructing a second runway and enhancing cargo handling facilities. 

CS Mudavadi noted that the proposal will have to undergo stakeholder engagement and be approved by the National Treasury, Attorney General and Parliament before an agreement is signed. 

"For the avoidance of doubt, all terms and conditions of the proposed arrangement are subject to negotiations in accordance with the provisions of the PPP Act and no terms have been agreed upon as yet," said Mudavadi.

"As and when the terms are agreed, there shall be appropriate safeguards to ensure that Kenya's national interests prevails and that the private party is held fully accountable for the performance of its obligations."

The Prime CS also pointed out that the government would conduct extensive investigations to determine the firm's suitability to be an investor of one of the country's national assets. 

"If the results of the due diligence are not satisfactory and/or the proposal is not approved, the government will have recourse to other options for bridging the infrastructure gap at JKIA, including consideration of alternative proposals."

His remarks come amid the controversy over the JKIA leasing deal despite the government clarifying that the airport is not for sale. 

“Am I a mad man? How do you sell a strategic national asset? You have to be insane. We must have the right investment for the airport. What we want to do is to work under the PPP programme,” President William Ruto said during a townhall discussion in Mombasa on Sunday.

Questions have since come out on whether the government advertised the tender, how Adani Holdings got wind of the deal to submit the proposal and if other companies participated in the tender. 

Further, critics have questioned whether a fair process was carried out before Adani Holdings was selected. 

Various stakeholders have appealed to the government to make the details of the deal public to enhance transparency and curb any corruption schemes.