Kenyan Court grounds Gautam Adani’s proposal to invest in biggest airport

A Kenyan court suspended a government plan to allow India’s Adani Airport Holdings Ltd. to operate its main airport for 30 years until it rules on the matter.

The High Court issued the order prohibiting any person from implementing or acting on the privately initiated proposal by Adani until the matter is determined, according to Faith Odhiambo, president of the Law Society of Kenya, an applicant in the case.

Adani didn’t immediately respond to a request for comment when contacted outside office hours.

The lawyers’ body and the Kenya Human Rights Commission, a non-governmental organization, are challenging the government’s right to lease the Jomo Kenyatta International Airport in the capital, Nairobi, to Adani Airport as it breaches the constitution.

“Leasing the strategic and profitable JKIA to a private entity is irrational” and contravenes the constitutional principles of “good governance, accountability, transparency, and prudent and responsible use of public money,” they said in their filings.

The parties also argue that the $1.85 billion deal between the government and Adani Airport is “unaffordable, threatens job losses, exposes the public disproportionately to fiscal risk, and offers no value for money to the taxpayer.”

They claim that Kenya can independently raise the funds to expand JKIA without leasing it for 30 years, according to their filings.

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Under the terms of the build-operate deal, the Indian billionaire Gautam Adani’s company would upgrade Kenya’s largest aviation facility and East Africa’s busiest airport and construct a second runway and a new passenger terminal.

The government has defended the deal insisting that the airport is stretched beyond its capacity and is urgently in need of improvements.

Kenya Airports Authority acting Managing Director Henry Ogoye said in July the proposal will be subjected to technical, financial and legal reviews to ensure it complies with the nation’s public-private partnerships laws.

The investment required is “significant and cannot be funded with the prevailing fiscal constraints without recourse to private funding,” Ogoye said.

Adani Airport controlled by Asia’s second-richest person, has a portfolio of eight airports dominating more than 50% of the top 10 Indian domestic routes. The airports account for 23% of Indian air traffic serving 20% of total passenger base.