Air operators call for review of JKIA PIP Concession Process

 

Jomo Kenyatta International Airport (JKIA)

The Board of the Kenya Association of Air Operators (KAAO) has confirmed that it does not support the concession of Jomo Kenyatta International Airport (JKIA) as currently conceived.

In a statement, KAAO noted that the stakes are too high for a one-bidder process for such an important strategic asset, and that the credibility of the potential partner is also in question.

This was deliberated after the Board met in their regular meeting on 4th of October 2024 as it endorsed the views of its membership in relation to the concession.

It noted that the best approach in this complex eco-system would be for a competitive and transparent bidding process with all the steps envisaged in the Public-Private Partnership (PPP) Act correctly followed.

The Board further opined that a clear vision of the end game for Kenya needed to be articulated, starting with adherence to the principles laid out in the National Aviation Policy and a well-developed JKIA masterplan
which should form the business case for a concession process.

Reflecting on the need for a feasibility study involving all stakeholders, it was observed that this process had
not taken place.

According to KAAO this would give all stakeholders – operators, users and the public, the best value from the concession agreement.

The Board confirmed that it advocates for a return to the drawing board, where a collaborative vision for JKIA’s future can be established; one that prioritizes the critical development of a second runway, terminal
expansions, and ensures that every stakeholder has an opportunity to contribute from the outset.

“This inclusive approach is vital for ensuring that JKIA maximizes its full potential as a dynamic, world-class aviation hub, particularly in the face of fierce regional competition.” The statement read.

Additionally, the Board observed that given JKIA’s strategic position, there had been in the past several PIPs and Expressions of Interest, which further supported the call for a competitive process.

Further noting the sequencing of events leading to the review process, the Board expressed its displeasure and disappointment at the lack of upfront stakeholder engagement in the development of such a critical plank of Kenya’s aviation sector.

The Board reviewed and endorsed its detailed memorandum on the concession proposal, which has now been shared with KAA, and sets out KAAOs opinion on a number of issues.

“The memorandum was based on the review of documents provided after a stakeholder briefing on 29th August 2024, which were received on 2nd September 2024 and included the Head of Terms Agreement Version 13th August 2024, the Feasibility Report by Adani Airports Holdings limited (AAHL) and the Privately Initiated proposal by AAHL dated March 2024.” The Board stated.

Adding that: “However, the financial model was not included, which significantly limits our ability to assess the proposal’s viability and raises fundamental questions about its overall feasibility and sustainability.”

By KBC NEWS