MPs order forensic audit, stop controversial Adani, JKIA deal

MPs have ordered a forensic audit on the deal between Kenya Airports Authority and India’s conglomerate Adani Holdings on the proposed upgrade of Jomo Kenyatta International Airport.

The Public Investments Committee on Commercial Affairs and Energy wants the auditor general to establish how Adani became part of the deal.

The committee, at the same time, directed that KAA stops any further engagements on the Adani proposal. There are active court orders on the same.

“It is the advice of the committee that you don't do anything with Adani until this committee reports this matter to Parliament,” said PIC chairman David Pkosing (Pokot South MP).

MPs warned KAA acting CEO Henry Ogoye of serious ramifications in the event of any breach of the directive.

“You will carry personal responsibility. The House with the power to do these things is the National Assembly. We will do our work as a committee,” Pkosing said.

He directed that a special audit report be tabled by the end of October.

MPs want the auditor to ascertain the estimated figure of upgrading the airport and how the $1.83 billion (Sh230 billion) was arrived at as the cost of improvements.

Auditors will also ascertain the scope of the package in terms of building a new terminal and a second runway.

MPs want auditors to find out the best way to identify a private sector player and whether a privately initiated investment proposal was the best route.

“The question we seek information on is whether there is an alternative way to save people money instead of the PIIP route,” Pkosing said.

How the arrangement affects other airports and aerodromes which depend on JKIA for survival will also be established.

The auditor will also assess how the private manager will work with the national airline and what happens with KAA staff.

The call for an audit came after KAA acting managing director Henry Ogoye was hard-pressed to give the committee answers.

Among the issues PIC raised was the speed at which Adani came in; being two weeks after a Spanish consultant ALG issued a feasibility report.

“How did you procure the consultant that did the feasibility study? How did Adani know there was a proposal on the table? Did you tailor-make this deal for them? Is it the only one in the whole world?” the members asked.

“We cannot avoid a special audit on the Adani deal. There is a high trust deficit in the country because of corruption. People think of deals being made when it comes to such projects,” Pkosing said.

“How can a Kenyan understand how an investor knocked on doors two weeks later after the feasibility report was published? It implies that Adani participated in the research.”

The committee pointed to an inside job. “There was a mischief and an inside job in bringing Adani on board.”

It said the call for audit does not mean that KAA should “kill the good dream of upgrading JKIA.”

“Greenfield was killed by unscrupulous people...if we don't do anything, JKIA is going to die. All we are saying is that we should involve Kenyans,” Pkosing said.

 Ogoye, in his submissions, said the authority did a study and found that equipment used at JKIA was obsolete.

But MPs questioned how KAA allowed the deterioration yet it makes profits every year.

“You collect revenue and report profits, why not plough it back to improve technology and equipment?” Rangwe MP Lilian Gogo, PIC vice chair, said.

The committee further wants answers on how Adani paid $50,000 (Sh6.4 million) before an agreement is signed.

“Was the public involved? Were elected representatives involved? Was the power of intent exercised?” MPs asked.

Ogoye said the money paid by Adani follows a law which requires that once a proposal is evaluated, the bidder pays the amount.

“If there is any contract to be signed, it has to be done by me and I have not done anything,” the MD said.

He said the upgrade was necessary as JKIA facilities are already overstretched.

“We are behind in terms of infrastructure. Our capacity is for 7.5 million passengers. Last fiscal year, we handled 8.6 million. The terminal capacity is below the demand,” Ogoye said.

JKIA should handle 35 flights per hour but currently does only 32 and has no space for parking cargo aircraft.

“We should park 68 aircraft but we can only park nine cargo aircraft at ago now, forcing cargo aircraft to use passenger parking,” the MD explained.

KAA did two feasibility studies as the initial one did not cover JKIA-specific issues. 

“We could not make an investment decision with the December 2022 report. We did a detailed report on JKIA,” Ogoye said.

It emerged that the consultant did a feasibility study which was released in February 16, 2024 and Adani submitted its proposal a week later.

The same consultant handled the feasibility study of the viability of the KAA facilities and issued a report in December 2022.