Prime Cabinet Secretary Musalia Mudavadi has provided clarity on the ongoing discussions surrounding the proposed modernisation of Jomo Kenyatta International Airport (JKIA) by Adani Airports Holdings Limited.

In a statement aimed at dispelling rumors and misinformation, Mudavadi emphasized that the government has not yet finalized any agreements with the Indian conglomerate.

“For the avoidance of any doubt, all terms and conditions of the proposed arrangement are subject to negotiation in accordance with the provisions of the PPP Act and no terms have been agreed upon yet,” Mudavadi said.

“As and when the terms are agreed, there shall be appropriate safeguards to ensure that Kenya’s national interest prevails and that the private party is held fully accountable for the performance of its obligations.”

The Prime CS stressed that Adani’s proposal, known as a Privately Initiated Proposal (PIP), is currently undergoing a rigorous process of review and negotiation in accordance with the Public-Private Partnerships (PPP) Act. He reassured the public that the government is committed to safeguarding the nation’s interests throughout these discussions.

Urgent need to mordernise JKIA

Mudavadi acknowledged the pressing need for modernization at JKIA, citing the airport’s aging infrastructure and its inability to keep pace with regional competitors.

He highlighted the various challenges faced by the airport, including leaking roofs, inadequate aircraft parking bays, outdated passenger terminals and baggage handling systems, and lengthy waiting times.

Mudavadi emphasized that a thorough due diligence investigation will be conducted to assess Adani’s suitability as an investor in the JKIA upgrade project. He assured the public that should Adani prove unsuitable, the government will explore alternative options to ensure the successful completion of the much-needed renovations.

Mudavadi reiterated the government’s dedication to maintaining transparency and accountability throughout the process, vowing to adhere to all legal frameworks and international regulations.

“We assure the public that every step of this project will undergo rigorous review and scrutiny. The Government is committed to maintaining transparency and accountability throughout the process.”

KSh260B to expand JKIA

He acknowledged the country’s tight fiscal space due to the public debt burden, making Public-Private Partnerships a prudent option for additional infrastructure investments, as outlined in the Budget Policy Statement 2024.

The proposed expansions of JKIA, the government estimates, will cost US$ 2 billion (KSh260 billion), “a sum that the Govemment of Kenya is constrained to fund due to the current tight fiscal situation.

The government rues that Kenya’s public debt as a percentage of GDP has risen to 69.7% (KSh11.2 trillion) from 46% in 2010.

“Given this tight fiscal space, the Govemment in the Budget Policy Statement 2024, indicated that it intends to make additional infrastructure investments by leveraging on the private sector, through PPPs.”