The proposed takeover of the Jomo Kenyatta International Airport (JKIA) by Kenya Airways is now raising eyebrows, even as two parliamentary committees jostle to probe the dealthat has been described by a watchdog body as suspect.
Even as Deputy President William Ruto described the concession as being above board, legislators have questioned the takeover, with the National Assembly Public Investments Committee (PIC) now asking Parliament to stop further engagements on the deal until its investment soundness is ascertained.
If the deal that is strongly backed by the government goes through, the perennially loss-making national carrier will take over the operations of the country’s major airport, considered east and central Africa’s hub.
But even as the matter comes up before the National Assembly this week, there is already a sibling rivalry between the PIC and the Departmental Committee on Transport over who should be interrogating the proposed deal. Last week, Speaker Justin Muturi had to step in to define the mandate of each committee after the departmental committee protested that PIC was overstepping its mandate.
But Muturi ruled that PIC also had the mandate to look into the matter, as it arose from an audit query, which is within its turf.
PIC wants the Executive to go slow on the process and first respond to serious questions that have been raised on the deal, cautioning that it could lead to the death of the profitable Kenya Airports Authority (KAA).
The committee has presented to the National Assembly a status report terming the proposed deal as shadowy and likely to lead to loss of taxpayers’ money, especially given the rush with which the Executive is pushing it through.
“The committee recommends that all engagements between the KAA and the Kenya Airways regarding the Privately Initiated Investment Proposal (PIIP) on the takeover of JKIA’soperations should be pended until the committee inquiry is concluded, and the House pronounces itself on the matter,” the report states.
“The proposed takeover is being rushed despite obvious risks associated with it, including concerns on its financial viability and the potential loss of jobs at KAA,” the report further adds.
The House is this week expected to debate the report.
PIC chairman Abdullswamad Nassir yesterday defended the committee’s position, saying it was critical for the deal to be interrogated before the takeover is approved.
“When we met the KAA team, we realised that there are many queries that require interrogation on this matter. They did not appear to us like a people who had been fully consulted,or even who were in the know on what is going on. That is why we are asking the House to first halt the process until we are convinced that this is a good deal,” said Nassir.
Already, the committee has asked the auditor general to undertake a special audit on how the PIIP – the instrument that is to guide the takeover – was arrived at, and if the law was followed in the entire process. “We want the auditor general to establish if the proposed concession arrangement was conducted in adherence to the laws,” Nassir said.
When they appeared before the committee last week, KAA said that at the beginning of this month, the national carrier owed them Sh3.8 billion, making a mockery of the concession. PIC also questioned the rush with which the concession is being pushed. In its report, the committee warns that taking away JKIA from KAA could ground the profitable State corporation, as the international airport accounts for nearly 83 per cent of the authority’s revenues and 51 per cent of the recurrent expenditure. “The authority would therefore lose the majority of its revenue-generating assets if the takeover was effected,” the committee told the House.
It notes that the concessional fee of Sh2.9 billion being offered by Kenya Airways for this financial year would not be enough to finance operations of other airports, airstrips and the head office run by KAA, as the non-JKIA entities gobble up Sh6.6 billion in recurrent expenditure.
This, they note, would leave a shortfall of Sh3.7 billion, which could financially cripple KAA, resulting to possible job losses and cut on costs.
The committee is also curious of a potential conflict of interest as the chairman of Kenya Airways, Isaac Awuondo, also chairs the Commercial Bank of Africa (CBA), which is a big shareholder at the national carrier and the entity proposing the taking over of the airport.