Several flights were today delayed after the Kenya Aviation Workers Union (KAWU) staged work boycott to hold protest march over the controversial takeover deal of the Jomo Kenyatta International Airport (JKIA) by Indian firm, Adani Enterprises.
The Informer Media Group established that a number of flights were delayed on Monday morning as the aviation workers left their work stations to hold the march.
However, despite the widespread disquiet from several quarters in the country including Members of Parliament (MPs), planned take-over of Kenya’s largest international airport including its operations and the management is set to be handed over to the Indian firm in November this year after Adani Enterprises set up a Kenyan subsidiary.
The flagship company of Gautam Adani’s sprawling corporate giant incorporated “Airports Infrastructure PLC (AIP)” in Kenya on August 30, according to a filing with the National Stock Exchange of India in Mumbai.
“AIP is incorporated to take over, operate, maintain, develop, design, construct, upgrade, modernise and manage the airports.” The filing reads in part.
The Kenyan subsidiary was set up by an Abu Dhabi group called Global Airports Operator, itself a subsidiary of Adani Enterprises, which will own 100 percent of AIP’s share capital. As part of the incorporation of the Kenyan company, Adani issued share capital of Sh6.75million, consisting of 6,750 shares at Sh1,000 each.
Today, aviation workers under the Kenya Airports Authority (KAA) held a demonstration at JKIA.
Armed with placards, the workers condemned a Public Private Partnership (PPP) that will see Indian-based Adani Group Holdings take over operations at East Africa’s leading airport.
KAA staff argue that the Adani deal poses a risk to their jobs in favour of foreign workers.
The aviation workers held the demonstrations early morning, despite an announcement from the Kenya Aviation Workers Union (KAWU) Secretary General Moses Ndiema, who laid a 7-day postponement of workers strike in order to ‘review the lease deal.
On July 28, 2024, following the heat created by the Gen-Z protests, president William Ruto laboured to explain to his audience that “leasing JKIA out to investors who can work with the government to expand the airport and ensure it serves Kenyans better under the Public-Private Partnership (PPP) would be welcome.”
“Let’s be honest Kenyans, the airport we have in Nairobi is made of canvas. This is a temporary structure we built almost 7 years ago. Ethiopia have a brand new airport. Rwanda the same. It is the reason why we need to work with investors to have a new airport in Nairobi.” Ruto said.
However, there has been sustained opposition among transport workers, experts and legislators to the takeover of JKIA by the Indian conglomerate in a deal shrouded by mystery.
While Adani noted that AIP has yet to commence operations or generate revenue, the establishment of a Kenyan airport subsidiary is a sign of its continued commitment to the JKIA takeover, even as domestic opposition to the deal grows.
Kenya Airports Authority workers went on strike at JKIA on Monday to oppose Adani’s proposal to take over the airport, amid ongoing concerns over job security.
Adani submitted a privately initiated proposal (PIP) to the Kenya Airports Authority (KAA) earlier this year to operate JKIA under a 30-year concession.
Adani’s financial proposal shows that $750 million will be spent on the development of a new terminal building, associated apron and taxiway system and two rapid exit taxiways.
This is expected to be completed by 2029.
A further $92 million would be used to improve the taxiway system, add two more rapid exit taxiways and construct other related facilities such as additional remote aircraft parking stands.
This phase is expected to be completed in 2035.
Adani is also proposing to spend $620 million on the development of new facilities, with the company adding that this will be done carefully to ensure seamless integration with the existing infrastructure.
The Indian company is proposing a city-side development consisting of hospitality, business centres and other amenities accessible to travellers and city residents.
The company wants to operate the airport for 30 years and transfer it back to JKIA at a value to be determined by the two parties, giving it an internal rate of return (IRR) on equity of 18 per cent.
IRR is a financial analysis metric used to estimate the profitability of potential investments. An investment with the highest likely IRR would be considered the best.
During the 30 years, Adani will be entitled to set the dollar-denominated charges to airlines and other users for its services at JKIA in a way that guarantees it an 18 per cent IRR.
Adani estimates that the targeted JKIA upgrade would see revenues jump from $163 million in 2025 (with $47 million going to the government) to $290 million in 2030, giving the government $52 million.
The revenue will rise to $740 million in 2045, with the government’s share at $70 million, and reach $1.2 billion in 2054, earning the state $76 million. JKIA’s existing Terminal 1 has five segments with a total built-up area of about 70,000 square metres.
The airport also has another Terminal T2 of 10,000 square metres for low-cost airlines.
Projections contained in the Adani proposals show that JKIA is expected to handle 33 million passengers and one million tonnes of cargo by 2055, up from around eight million passengers and 0.5 million tonnes of cargo at the end of 2023.
