The National Treasury is exploring alternative public-private partnership (PPP) models to finance the country’s mega infrastructure projects.
It follows the cancellation of Adani Group-led initiatives for the Jomo Kenyatta International Airport (JKIA) and the Kenya Electricity Transmission Company (KETRACO).
National Treasury Principal Secretary Dr. Chris Kiptoo stated that the country’s fiscal position is untenable, making it impractical to finance key infrastructure projects like the upgrading and modernisation of JKIA through the national budget.
He emphasised that taxpayers are already burdened by the current tax regime.
Appearing before the National Assembly’s Public Accounts Committee (PAC) on Monday, Kiptoo highlighted the urgent need for JKIA's modernisation.
He noted that the airport, designed in 1978 to handle 5–7 million passengers annually, is now managing over 10 million passengers, straining its capacity and functionality as East Africa’s primary aviation hub.
“JKIA, when it was built and designed, was meant to handle about 5–7 million passengers. Today, as the East African hub, it is handling in excess of 10 million passengers. Therefore, it is in dire need of upgrading and modernisation to accommodate these numbers,” Kiptoo told MPs.
The PS explained that the amount required for such a significant project cannot be raised through the national budget.
“The only viable way to finance this is through a public-private partnership (PPP) model. Since Kenyans have rejected the Adani Group, we will need to identify a partner with better ideas and options to execute the project, not necessarily Adani,” he added.
The PS appeared before the Butere MP Hon Tindi Mwale led-committee to respond to Auditor General's report for the financial year ending June 30, 2022, concerning the State Department for the National Treasury.
President William Ruto cancelled two major deals involving Indian billionaire Gautam Adani after the tycoon was indicted for fraud by US prosecutors.
Funyula MP Wilberforce Oundo, emphasised that a majority of Kenyans now favor public-private partnership (PPP) models, citing the successful completion of the Nairobi Expressway as a prime example.
However, he argued that projects like the modernisation of JKIA present challenges that might make them unsuitable for PPP models under certain circumstances.
“PPP is the way to go when it comes to financing mega projects, given the limited and constrained fiscal space our country is currently facing,” Oundo stated.
He underlined the necessity of PPP models to bridge the gap between ambitious infrastructure goals and the reality of strained public resources.
On his part, Bura MP Yakub Adow also voiced support for PPPs but stressed the critical need for transparency and public engagement in their implementation.
He stressed the importance of conducting thorough public participation to educate citizens, ensuring legitimacy and widespread acceptance of such partnerships.
“The National Treasury must involve the public sufficiently to enlighten the masses and secure legitimacy for these projects. If these deals are shrouded in secrecy, as was perceived in the case of the Adani Group's proposals for JKIA and KETRACO, it will be disastrous,” Adow warned.
