Scandal-ridden Adani Group eyes JKIA expansion deal
Fresh from securing a vice-like grip on investments in India’s air transport sector, Adani Airports Holdings Ltd (AAHL), a subsidiary of Adani Group, has set sights on a key contract at East Africa’s aviation hub, the Jomo Kenyatta International Airport (JKIA).
According to the Kenya Airports Authority (KAA), AAHL has submitted a proposal under the Public Private Partnerships Act 2021, with the Indian firm seeking to invest in a new passenger terminal building, a new runway, as well as the refurbishment of JKIA facilities.
KAA’s plan to develop a new runway at JKIA has been in the works for years even as members of the public complain about substandard structures such as leaking roofs in the airport.
In a note to the public, KAA acting managing director Henry Ogoye said, “I wish to assure our staff that no jobs are at risk. I also wish to assure the airport business community and operators that the expanded facility will create additional business opportunities and attendant benefits.”
Back in India, AAHL’s owners of the parent firm Adani Group has faced scrutiny related to how the company beat some 25 other firms, winning bids to control the country’s six airports in 2019.
According to media reports, the Group won bids for the privatization of India’s Ahmedabad, Guwahati, Mangaluru, Thiruvananthapuram, Jaipur, and Lucknow airports despite not demonstrating prior experience in running commercial airports before.
Critics argued that the criteria used in securing the bids in favour of Adani raised questions about transparency and fairness of the bidding process. This controversy included concerns over AAHL’s ability to meet the high bid amounts, with delays in taking over some airports.
At the height of the Covid-19 pandemic in 2021, the Adani Group became the largest airport infrastructure company in Indian subcontinent, accounting for roughly one in every four passengers in India going through an airport they run. At the time, Adani’s airports accounted for one-third of all the air cargo recorded in India.
“AAHL is now India’s largest airport infrastructure company, accounting for 25 percent airport footfalls. With the addition of MIAL, it will now also control 33 percent of India’s air cargo traffic,” the Adani Group said in a statement just after purchasing a majority stake in Mumbai International Airport Ltd in 2020.
AAHL’s purchase of 74 percent stake in Mumbai International Airport from Hyderabad-headquartered Indian conglomerate GVK Group. According to Hindustan Times, the deal was marred by allegations of financial irregularities, including allegations that GVK Group siphoned off funds meant for airport development. After losing the Mumbai and Navi Mumbai airports to Adani, GVK group exited the sector.
Read also: Hospitality sector powers JKIA customs to hit Sh50 billion in collections
JKIA medium tern investment plan
AAHL’s interest in Kenya’s aviation industry comes at a time when the region’s aviation industry is attracting key partners keen on expanding air transport infrastructure.
In June Cabinet approved the JKIA Medium Term Investment plan, an initiative that seeks to upgrade the airport passenger terminal, taxiway, and apron infrastructure to enhance the the facility’s competitiveness across the region.
“The policy seeks to maximize the contribution of the aviation sector to Kenya’s growth by enhancing connectivity at both the national and international levels,” the cabinet brief noted in part.
At the moment, JKIA is projected to handle over 42 million passengers annually by 2050, presenting an urgent case for policymakers to overhaul its infrastructure.
“The attendant investment requirement is significant and cannot be funded with the prevailing fiscal constraints without recourse to private funding,” KAA explained in its update.
According to Mr Ogoye, the project will be preceded by stakeholder engagement, clearance by the Attorney General as well as approval by the National Treasury.
