Treasury CS John Mbadi has asked courts to handle cautiously petitions challenging the proposed Jomo Kenyatta International Airport takeover by the Adani Group in the interest of the country’s investor attractiveness.
Several petitions have been filed challenging the proposed 30-year accession of the Sh1.1 trillion airport by the Indian conglomerate at a cost of $1.83 billion (Sh230 billion).
Petitioners Journalist Tony Gachoka, Mt Kenya Jurists and the Kenya Human Rights Commission have alleged that the deal is riddled with illegalities, including a lack of mandatory public participation, and have asked the courts to nullify the process.
Appearing before the Public Debt and Privatisation Committee of the National Assembly on Tuesday, Mbadi asked the courts to treat the matter with utmost care, lest they scare away potential investors.
“Let it be concluded in a manner that is objective so that no party feels hurt. The processes need to be clear even if you are terminating so that any investor out there would not treat Kenya as a hostile ground for investment,” Mbadi said.
The CS said it’s important that, as a country, Kenya gives the right impression to the world that it’s a country with laws and legal frameworks that are effective and objective.
“We have to be careful; if we do it in a way that would send signals that this is a country that does not support direct foreign investment, then we are running the risk of in the future not attracting investors. But that does not mean we don’t have to be careful about how we go about it,” he added.
Mbadi spoke on the same day the Public Investments Committee on Commercial Affairs and Energy halted further engagements on the Adani deal until a forensic audit of the whole process is done.
The committee directed the Kenya Airports Authority not to negotiate Adani's airport upgrade proposal until the auditor general establishes how the Indian firm was brought on board.
They questioned the suitability of the Privately Initiated Investment Proposal for the airport upgrade and sought to know whether it was the best available option.
“The question we seek information on is whether there is an alternative way to save people money instead of the PIIP route,” PIC chairman David Pkosing said.
“It is the advice of the committee that you don't do anything with Adani until this committee reports this matter to Parliament,” he added.
The committee warned KAA acting CEO Henry Ogoye that he would be held personally liable if he went against the directive, saying MPs have the last word.
"The House with the power to do these things is the National Assembly. We will do our work as a committee,” Pkosing said.
Meanwhile, Mbadi who appeared before the Public Debt and Privatisation Committee alongside Public Private Partnership Director General Christopher Kirigua, assured KAA employees working at the JKIA that their jobs would be secure should the Adani deal go through.
He said their welfare is covered under the concession agreement between KAA and Adani Holdings.
“This is what it says: During the interim management period, JKIA employees will remain employed by the grantor. The concessionaire [Adani] will make an offer to the existing employees on terms that are no less favourable to their existing terms of employment.”
Mbadi told MPs that the staff were taken through the deal after they went on strike on September 11, expressing fears that they would lose their jobs.
The airport workers' strike ended after a day of chaos for travellers and the Kenya Aviation Workers Union (KAWU) agreed to return to work after being given assurances that the deal with Adani would not be finalised without their approval.
Mbadi further dispelled the assumption that the government is desperate to bring on board Adani to rescue the country from a debt crisis, saying the deal is a drop in the ocean compared to Kenya’s monetary needs.
He said what has been projected as a share to the government should the deal sail through is about Sh6.5 billion per year.
“That money, when we receive it, I think it will not help us pay our debts. We may inject it into KAA to modernise other airports because KAA is also struggling. Much as we have the debt issues, this money may not help us solve much because this is a huge economy,” he said.
The National Treasury, however, assured MPs that any amount above $45 million that Adani will make annually will go to the government.
"Projections of the revenue and investment plan, that is there. There was a feasibility study that KAA had conducted that does have that,” Public Private Partnership Director General Kirigua said.
He further clarified that local banks have been included in the Adani deal as a way of strengthening local financial institutions by ensuring they participate in project finance transactions.
“It’s actually a requirement that was discussed during the negotiations and there’s no transaction that PPP has as we speak, not just Adani, we ensure that we strengthen local financial institutions not only for foreign currency but also strengthen our financial markets.”