Adani Says They Paid Ksh. 6.5M to Kenyan Gov’t for JKIA Takeover Proposal

Adani Airport Holdings Limited, a subsidiary of India’s Adani Group, has revealed that it paid Ksh. 6.5 million ($50,000) to the Kenyan government as a review fee for its proposed takeover and modernization of Jomo Kenyatta International Airport (JKIA) in Nairobi. Furthermore, this payment was part of the company’s $1.85 billion (Ksh. 242 billion) bid to manage and upgrade the airport.

Gautam Shantilal chairman of the Adani Goup

Highlights

Review Fee Payment: Adani Group paid Ksh. 6.5 million to the Public Private Partnerships Facilitation Fund.
Legal Battle: The Kenya Human Rights Commission (KHRC) and the Law Society of Kenya (LSK) filed a case to halt the proposal.
Feasibility Study Submitted: Adani conducted a feasibility study on the project’s financial plan and social impact.
Court Proceedings: The project is currently paused due to a legal case, with the next mention scheduled for October 8.

Submission and Review Fee

In court filings submitted on September 17, Adani stated that they paid the review fee to the Public Private Partnerships Facilitation Fund as required by Kenyan law. Furthermore, the company’s legal team confirmed, “Upon submission of the PIP (Privately Initiated Proposal), the 5th respondent (Adani Airport Holdings Limited) duly paid a review fee of USD 50,000 to the Public Private Partnership Facilitation Fund.”They made this payment alongside other documentation, including tax compliance and financial records, to facilitate the government’s due diligence process on the project.

The Legal Challenge

Adani’s proposal has come under legal scrutiny after the Kenya Human Rights Commission (KHRC) and the Law Society of Kenya (LSK) filed a lawsuit on September 9, seeking to block the project. The company’s legal team confirmed this payment. Moreover, they provided other documentation, including tax compliance and financial records, to facilitate the government’s due diligence process on the project.

In response, Adani denies claims that it has already secured a 30-year lease for the airport, stating that the project is still in the review and due diligence phase. They maintain that the Kenya Airports Authority (KAA) acknowledged their proposal and authorized them to move forward with a feasibility study.

As part of its bid, Adani submitted a comprehensive feasibility study, detailing the project’s environmental and social impact, the financial plan, and how it would benefit the Kenyan public. Additionally, the company stated in its court documents, “The project is aligned with national infrastructure priorities and aims to address the long-standing infrastructure issues at JKIA.”

Adani also provided a preliminary operational plan for the airport, emphasizing that the project would carry out transparently and align with Kenya’s infrastructure needs.

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Legal requirements for privately initiated proposals

Kenya’s Public Private Partnerships Act outlines strict requirements for privately initiated proposals, including the necessity for alignment with national infrastructure priorities, fiscal affordability, and value for money. Additionally, the law requires paying a non-refundable review fee of 0.5% of the project’s estimated cost or $50,000, whichever is lower, into the Public-Private Partnership Facilitation Fund.

The law further clarifies that paying this fee does not create any obligation for the government to approve the proposal, ensuring that each bid receives a fair and thorough evaluation.

What’s Next?

Adani claims it submitted the proposal in March 2024 after identifying the need to upgrade JKIA through reports in the Kenyan media. This aligns with previous statements made by former Transport Cabinet Secretary Kipchumba Murkomen, who hinted at a facelift for JKIA but did not specify the costs involved.

Currently, the project’s progress is paused as the court case moves forward. The case is set for mention on October 8, and until then, any further action on the proposed lease has been halted.