An aerial view of Jomo Kenyatta International Airport.
© Kenya Airports Authority
The High Court of Kenya has blocked India’s Adani Group from leasing Jomo Kenyatta International Airport (NBO) in a deal that would have enabled the gateway to be expanded using private capital.
The temporary suspension relates to a 30-year lease at the country’s biggest gateway serving the capital Nairobi and run by Kenya Airports Authority (KAA). NBO is mainland Africa’s seventh busiest hub, serving 8.8 million passengers in FY2022/23.
The potential deal with Adani has raised public concerns over recent months about the loss of a strategic national asset which contributes 5.5% of Kenya’s GDP. Airport workers, via their union representatives, have also opposed the proposed takeover with threats of strike action. It seems that the courts have taken such concerns onboard—for now at least.
The Law Society of Kenya (LSK), the country's top bar association, and the Kenya Human Rights Commission (KHRC) made a joint petition on September 9 telling the High Court that Kenya could independently raise the US$1.85 billion required to upgrade Nairobi’s aging airport.
The petitioners’ main objection to the Adani deal was that it was happening without enough transparency while the KAA, in July, noted that the Adani deal was merely "a proposal subject to technical, financial, and legal reviews"—in other words, it was far from a done deal. According to KHRC, Adani had pledged almost US$2 billion to “upgrade and expand” the airport, but the commission believes the Adani proposal is “unaffordable, threatened job losses, disproportionately exposes the public to fiscal risk, and offered no value for money to the taxpayer.”
KHRC and the Law Society of Kenya (LSK) wrote to the KAA in July and August seeking details of the contract. KHRC stated: “Despite rising public demand for transparency, the government continued to withhold information about the deal.”
© Kenya Airports Authority
While the over-capacity, two-terminal gateway is in desperate need of an upgrade, it seems that the courts believe the deal with Adani has not had enough scrutiny.
High Court Judge John Chigiti issued orders, this week, temporarily halting Adani from taking over NBO. He also allowed KHRC and LSK leave to file a judicial review over the decision to lease the airport.
A judicial review refers to the authority of the courts to examine the actions of the legislative, executive, and various administrative arms of the government and to determine whether such actions are consistent with Kenya’s constitution. The case will come up again on October 8, 2024, but a date for a final ruling has not been set.
On X (formerly Twitter), LSK President Faith Odhiambo said on Monday: “The court has issued a stay prohibiting any person from implementing or acting on the privately initiated Adani proposal over JKIA, pending the conclusion of the court case.”
Neither Adani Group nor Kenya Airports Authority have commented on the case being blocked in the courts. For KAA in particular, the decision will prove frustrating given how the NBO asset has been so underdeveloped over the decades due to some false starts. The authority has said that the airport's aging infrastructure "is a threat to our regional competitiveness." Hence the urgency for private investment. The KAA also assured staff that no jobs would be at risk.
A promising, but slow-burn, greenfield terminal project valued at more than US$500 million was in train but had to be abandoned in 2016 due to the contractor failing to secure funds. A new deal has therefore been eagerly sought. While the Adani agreement has been temporarily stopped, it may yet proceed depending on the final judicial review.