Collapse of JKIA-Adani Deal a Blow to Regional Aviation Ambitions » Capital News

Nairobi, Kenya Jun 19 – Orange Democratic Movement leader Raila Odinga has regretted the collapse of the proposed Adani airport deal at Jomo Kenyatta International Airport (JKIA), calling it a ‘major disappointment’ that has hindered the country’s potential to become a key aviation hub on the African continent.

Speaking during the second day cabinet retreat in Karen, Odinga traced the troubled history of the multi-billion-shilling airport expansion deal, saying repeated cancellations including the most recent involving India’s Adani Group had stalled infrastructure ambitions and ceded regional leadership to competitors like Ethiopia and Rwanda.

“Kenya can become a hub, a big hub. I was very disappointed when we were not able to move on with the airport contract. That was very unfortunate,” he said.

The initial Greenfield Terminal project, which was meant to expand JKIA’s passenger and cargo handling capacity, was first awarded in 2012 to Chinese firm China National Aero-Technology International Engineering Corporation (CATIC) and Quebec, a Canadian consortium, during the Grand Coalition Government when Raila served as Prime Minister.

The contract was abruptly cancelled in 2016, with the government citing concerns over cost and project feasibility.

“You know, we had awarded the Greenfield airport contract before we left government with Quebec in 2012. That contract was canceled. Then it was given again to the same contractor later, but again canceled somewhere because of disagreements in the middle,” Odinga explained.

In 2023, the government revived plans for a major expansion of JKIA through a public-private partnership with Adani Group, India’s largest airport operator.

President William Ruto’s administration taunted the deal as a strategic move to position Nairobi as a regional transport and logistics hub.

However, the contract was shut down following a combination of political pressure and public concern over transparency and geopolitical implications.

“When we now brought in the Adani, they brought all this politics, and then the contract was canceled. If that is not done, Nairobi has become dormant,” Odinga noted.

Odinga pointed to developments in Ethiopia and Rwanda as examples of countries that are outpacing Kenya in aviation infrastructure.

He also drew comparisons with the UAE, where state-owned airline Emirates operates as a national economic engine rather than a profit-driven enterprise.

“Look at Addis Ababa. It’s going, and now they’re putting up a big new airport. So, Addis Ababa is going to be the hub around Ethiopian Airlines. It’s the dominant airline now on the continent. Kenya Airways can do the same… but we are not doing it,” he lamented.

“People in the Emirates do not look at the airline for making profits. It’s basically a vehicle bringing investors, tourists, shoppers to the Emirates. You can be making losses so long as you’re bringing people to our country,” Odinga added.

President Ruto has directed the cancellation of infrastructure and energy deals with Indian billionaire Gautam Adani following criminal charges in the US.

Ruto said the Public Private Partnership (PPP) for the expansion of the Jomo Kenyatta International Airport (JKIA) and the Kenya Electricity Transmission Company Limited (KETRACO) are now cancelled due to the latest information.

Adani was indicted by the US Department of Justice, alongside his nephew Sagar Adani, for orchestrating a bribery scheme involving more than $250 million in payments to Indian government officials to secure solar energy contracts.

“I now direct in furtherance of the principles enshrined in article 10 of the Constitution on transparent accountability and based on new information provided by investigative agencies and partner nations that the procuring agencies within the Ministry of Transport and the Ministry of Energy Petroleum to immediately cancel the ongoing procurement process for the JKIA expansion,” he said last year.

This isn’t the first controversy for Adani. In January 2023, US-based Hindenburg Research accused Adani of “brazen stock manipulation and accounting fraud.”

The report led to an $80 billion decline in Adani’s net worth, though his fortune currently stands at $85.5 billion, according to the Bloomberg Billionaires Index.

Adani, often seen as an ally of Indian Prime Minister Narendra Modi, has denied all allegations, calling the Hindenburg report “nothing but a lie.”