On 5 December 2023, President of Kenya William Ruto met Prime Minister of India Narendra Modi at New Delhi’s Hyderabad House, the Indian government’s opulent guest house for visiting dignitaries. As the meeting between the heads of government and their officials was proceeding, there was a ‘surprise visitor’. It was Gautam Adani, one of the world’s richest men and an industrialist who is perceived to be close to Modi.
A person who was present at the meeting told one of the writers of this article that Adani’s entry was ‘sudden’. Modi had been discussing various topics with Ruto, one of which related to Indian ‘expertise’ in revamping airports. In March 2024, less than three months after this meeting, the Adani Group submitted a detailed proposal to the Kenyan government regarding Nairobi's Jomo Kenyatta International Airport (JKIA). In it, the Group proposed to invest US $1.85 billion to upgrade the airport in return for a 30-year lease and continued equity in the airport. This article describes the resulting furore, drawing on several online publications.
In Kenya, the Ruto administration has been racked by turmoil and public protests. Among several reasons why the President has lost popularity is a deal with the Adani Group.
On 11 September 2024, workers at the JKIA went on strike. Several flights were cancelled and many were delayed for long hours. The strike was to protest against the Kenyan government’s apparent intention to lease the operations of the airport to Adani for 30 years, in exchange for an investment of $1.85 billion.
The Kenya Aviation Workers Union stated that the proposed agreement revealed in July would lead to job losses and bring non-Kenyan workers into the country. The union has alleged that the agreement would ‘harm’ Kenya’s economy by diverting profits from the government body running the airport to a foreign entity – the Adani Group.
A final agreement between the Adani Group and the Kenyan government has yet to be signed. The Ruto government has defended its proposal to enter into a partnership with the private sector as ‘essential’ for upgrading the airport, which is not just Kenya’s largest airport but also one of the busiest in the 54 countries that make up the continent of Africa.
The Jomo Kenyatta International Airport (JKIA)
JKIA, located at Embakasi, 15 km south-east of Nairobi’s city centre, was constructed in the 1950s. Its current name was bestowed in 1978 in honour of Kenya’s first president, Jomo Kenyatta. The airport plays a vital role in east Africa’s network of travel and trade; it serves as a major hub for international flights. JKIA handled approximately 8.8 million passengers and 380,000 tonnes of cargo in 2022-2023, making it one of the most important airports on the continent. Its strategic location supports Kenya’s growing tourism and agricultural sectors. In recent years, JKIA has faced operational challenges because of its aging infrastructure and power outages. To address these issues, the Kenyan government has been attempting to modernise the airport.
Past efforts to modernise JKIA airport
Proposals to modernise JKIA go back over a decade, gaining momentum in 2013, during President Uhuru Kenyatta’s tenure when Ruto was Kenya’s deputy president. A contract was awarded to a Chinese firm, Anhui Construction, that was tasked with raising US $600 million to carry out the job.
Anhui reportedly failed to raise the capital required. When the project collapsed Kenya lost many millions of dollars in sunk funds and a termination settlement to the Chinese contractor. The episode left a sour taste in the mouth of the country’s citizens. According to the Kenya-based news portal Citizen Digital, ‘top figures in government and private businessmen differed (with one another) and the airport deal was cancelled as a move … (aimed at) settling political scores.’
After Ruto became President of Kenya in 2022, the government proposed a public-private-partnership model to fund the program to modernise the airport.
Adani’s controversial entry
In June 2023, Kenya’s then Transport Cabinet Secretary Kipchumba Murkomen foreshadowed a formal invitation to investors to participate in the terminal project. He said that a process inviting expressions of interest (EoI) would soon be floated, but, according to Citizen Digital, there is no evidence that such an invitation went out prior to Adani submitting its ‘private’ offer.
In December 2023, Murkomen announced that the government had initiated a different process to issue a public advertisement to which bidders could respond. However, as in the case of the invitation for EoIs, no advertisement was published.
In February 2024, a Spain-based consulting firm, ALG, advised the Kenya Airports Authority (KAA) that a private developer should be selected through an open-tendering process and given a 30-year concession period.
In March 2024, the Adani Group submitted a private ‘build-operate-and-transfer (BOT)’ proposal to the Kenyan government to lease the JKIA for 30 years while investing $1.85 billion. It proposed that at the end of the 30-year lease period, Adani Airport Holdings Limited (AAHL) would hold an 18% equity stake in the airport. In addition, the government would be required to pay a concession fee starting at $40 million that would increase by 10% every five years. The proposal also reportedly sought tax concessions for the Adani Group as well as constraints on the ability of Kenya to build other airports in the Nairobi area. The Adani Group’s proposal was not made public.
According to Citizen Digital, in May 2024, the KAA published an invitation for bids in May 2024 for an ‘advisory agency’ to guide the government regarding an airport deal.
According to a story published by the OCCRP, the Adani proposal finally became public in July 2024 when a whistleblower claimed in a social-media post that the government would be adopting it. Indeed, according to documents seen by the OCCRP, the Adani proposal had been approved to proceed to the ‘project development phase’, which entails additional consultation and negotiation.
There was immediate outrage amongst sections of the Kenyan community over the lack of transparency in the process, with members of parliament and NGOs scrambling to obtain more information. The proposed deal was opposed by the union representing aviation workers and by some civil-society organisations.
According to the OCCRP, the Adani Group had argued that a privately-initiated proposal (PIP) ‘offers distinct advantages over competitive bidding’, allowing ‘the government to secure terms beyond purely financial considerations, ensuring the welfare of citizens… Conversely, competitive bidding risks making the deal purely transactional, without room for mutual considerations. A PIP creates a win-win scenario for the people of Kenya, the GOK, and private investors.’
On 24 July, the KAA sought to allay concerns by making assurances that Adani’s proposal would be subjected to due process, including ‘technical, financial and legal reviews’. On 28 July, the president himself attempted to hose down the anger, saying that only a ‘mad man’ would sell an asset as significant as the JKIA. By then, however, it was too late. The hashtag #OccupyJKIA started was trending on social media. Protests followed.
On 30 August, Adani Enterprises Limited filed a notification with the National Stock Exchange of India that a new company had been incorporated in Kenya under the name, Airports Infrastructure PLC, as a step-down subsidiary company. The Kenyan company was to be wholly owned by a company based in Abu Dhabi, which in turn was to be owned by the Adani Airports Holdings limited, an Adani Group entity.
An investigation by the Senate of Kenya was critical of the government. It uncovered that a company from Argentina, Corporación América Airports, had also expressed an interest in operating Kenya’s airports. The company had reportedly not received a response from the government.
Court intervention and workers’ unrest
In late July 2024, Kenyan lawyer Issack Lango Guyo filed a petition in the High Court, challenging the constitutionality of the negotiations between the government and Adani over the airport proposal. According to Nation Africa, he argued that the process had been expedited without adherence to established procedures and failed to meet essential legal requirements.
The Law Society of Kenya (LSK) and the Kenya Human Rights Commission (KHRC) filed another petition in the court, arguing that the Adani deal was ‘unaffordable, threatens job losses, has a disproportionate aggregated fiscal risk exposure to the public, and offers no value for money to the taxpayer’. The KHRC and the LSK had earlier sent letters to JKIA in July and August 2024 seeking details on the arrangement, which they called ‘opaque’. In response, the High Court temporarily suspended the Adani deal to ‘take over’ the operations of JKIA. According to Reuters, the court prohibited any further government action on Adani’s proposal until it decided the case.
According to Reuters, the Kenya Aviation Workers Union first protested against the Adani deal in August 2024. Then, on 11 September, hundreds of workers at JKIA went on strike, disrupting operations at the airport. The workers’ union issued a seven-day strike notice, calling the government’s policy an ‘unlawful intended sale’ of the airport to Adani.
According to Deutsche-Weller, a representative of the union said: ‘We have not said that we have accepted Adani. We will be given veto powers, and our signature will be needed for the process to move forward… If it is a bad deal, we will not sign (an agreement to stop the agitation).’
On 18 September, AAHL submitted a response to the Kenyan High Court stating that the project is still at the due-diligence stage and is yet to be formally approved, while also emphasising the need for the project to proceed. According to Nation Africa, the Adani company’s legal representative said that the project had been cleared by the government to proceed to a feasibility study.
Meanwhile, the Adani Group issued a media statement repudiating reports that it had issued an earlier media statement whose content had been seen by many as inflammatory. Adani’s formal media statement said ‘the Adani Group has neither issued any such statement nor engaged with the media on this matter [the airport proposal and its progress with the government of Kenya]’.
The next court hearing is scheduled for 8 October 2024.
