Adani’s $1.85bn Nairobi Airport Deal Suspended by Kenyan Court

The right of the government to lease the Jomo Kenyatta International Airport in Nairobi, the capital of Kenya, has been challenged by a legal body as well as a non-governmental organisation called the Kenya Human Rights Commission

Outlook Business Desk

Updated on: 10 September 2024 9:17 am

Gautam Adani

The Kenyan High Court has issued a suspension order on a $1.85 billion agreement between the Kenyan government and Adani Airport Holdings Limited (AAHL). Under the deal, AAHL was granted the rights to operate Kenya’s main airport for 30 years. This ruling creates a halt on the expansion plans of Gautam Adani's company. This was first reported by the Financial Times.

Until the matter is determined, people have been barred from acting on the proposal. As for AAHL, it did not respond to the issue. The right of the government to lease the Jomo Kenyatta International Airport in Nairobi, the capital of Kenya, has been challenged by a legal body as well as a non-governmental organisation called the Kenya Human Rights Commission.

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The group has reportedly said that the leasing is irrational, and it also stands in sharp contrast to the principles of good governance. As per Bloomberg, the groups mentioned in a filing that “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.”

The portfolio of Adani Airports has as many as eight airports, which include Mumbai airport, Navi Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram airport. These airports contribute for 33 per cent of India’s air cargo traffic. The company website says, “AAHL is India's largest airport infrastructure company, accounting for 25 per cent of passenger footfalls and 33 per cent of India's air cargo traffic.”

The parties who have been opposing the $1.85 billion deal also mentioned that it is “unaffordable, threatens job losses, exposes the public disproportionately to fiscal risk and offers no value for money to the taxpayer”. As per Bloomberg, the parties have claimed that Kenya has the potential to raise the funds independently without leasing the airport for thirty years.