Privately-Initiated Proposals: JKIA and Adani Group Controversy in focus

Certainly, by now you have heard of the Adani Group. If not, you must have come across the rumors that the government is selling our Jomo Kenyatta International Airport (JKIA) to A firm from India.  This controversy reached a boiling point when members of the Budget and Appropriation Committee questioned the Prime Cabinet Secretary about allegations that the government had entered into a private deal to lease JKIA to the Indian firm Adani Airport Holdings Limited. 


To clear the air, the Prime Cabinet Secretary assured the public that JKIA is not up for sale. The Kenya Airports Authority (KAA) later issued a statement clarifying that they had received a Privately-Initiated Proposal (PIP) from the Adani Group for the construction of a new passenger terminal building, a second runway, and the refurbishment of existing facilities at JKIA. 


To contribute meaningfully to this discussion, it's important to understand what a Privately-Initiated Proposal (PIP) is. A PIP is a proposal made by a private entity to undertake a public infrastructure project without the government having formally solicited such a proposal. Key aspects of a PIP include: 

  • Initiation by the Private Sector where a private company identifies an infrastructure need and proposes to government a project to address it. 
  • Alignment with public goals where the project is designed to align with national infrastructure priorities and address a clear societal need. 
  • Injection of Innovative solutions as well as investment capacity that the public sector may lack. 


The legal framework governing PIPs in Kenya is found under the Public-Private Partnership (PPP) Act. Section 40 provides details on how such proposals should be submitted and evaluated. The Act ensures that PIPs meet public interest requirements and regulatory standards. This provision encourages private sector innovation and investment in public infrastructure, ensuring projects are relevant and beneficial to the community. 


Privately-Initiated Proposals (PIPs) offer numerous benefits, including innovation and efficiency brought by private entities, which often lead to knowledge transfer to the public sector. They also enable risk sharing between the public and private sectors and provide funding and expertise that governments might lack, allowing public resources to be used for other essential projects. Overall, PIPs help the Kenyan government effectively and efficiently meet the country's infrastructure needs. 

 

However, despite these benefits, the controversy surrounding the alleged private deal to lease Jomo Kenyatta International Airport (JKIA) to Adani Airport Holdings Limited raises questions about the transparency and communication practices of the government and the Kenya Airports Authority (KAA). It is crucial for such proposals to be carried out in a transparent and accountable manner from the outset. The proposal deposing on when it was received should have been publicized   and the public allowed to give their input. This would have gone a long way to prevent misinformation and disinformation on the project as well as the attendant panic that it continues to cause. 

 

Be that as it may, we are now aware that the Proposal is with KAA. We need to watch out for the following:  


Ensure that the proposal adheres to all relevant laws and regulations, including the Public-Private Partnership (PPP) Act, and conduct thorough environmental and social impact assessments to mitigate adverse effects on the environment and local communities. The project must align with national infrastructure priorities, address a clear societal need, and provide tangible public benefits, avoiding the pitfalls of white elephant projects that fail to benefit the public. 


 Given our growing debt burden, KAA must implement a robust risk management plan with a clear definition of risk allocation between the public and Adani Group. They must assess the financial viability of the project to prevent potential financial burdens on the government which in turn will rest on us, the taxpayers. Another ask from the public would be for both government and Adani to clear identify and disclose their sources of funding. The Government should also be clear in terms of the contribution if any being made from public coffers into the project. We will also want to see a strict cost management practices to ensure efficient application of the resources put into the projects. 


 We should also scrutinize the contractual documents if the deal sails through and ensure they capture clear and detailed contractual responsibilities, expectations, and deliverables for all parties involved. A sound dispute resolution (including pre-dispute resolution) clause to address conflicts that may arise and prevent unnecessary delays and cost overruns must be in the contractual documents. 


 A robust and continuous performance monitoring and evaluation plan is essential for ensuring that a project adheres to high standards of quality throughout its design, construction, and operation phases. This plan should involve a team of qualified professionals with the necessary expertise and competence to oversee the project's progress. Their role is to ensure that the project progresses according to the milestones outlined in the contract, maintaining high standards and meeting all agreed-upon criteria. Regular assessments and evaluations by this team will help identify and address any issues promptly, ensuring that the project remains on track and delivers the intended benefits effectively. 


We will also be closely monitoring the development of a clear stakeholder analysis, mapping, and engagement plan throughout the planning and implementation stages. Open communication is crucial for addressing concerns and providing regular updates. The recent leaks of documents to the public suggest that some stakeholders of KAA may have been disgruntled or felt uninformed about the ongoing developments. This underscores the importance of effective stakeholder management in such processes, highlighting the need for transparent and proactive engagement with all involved parties 


It is reasonable to conclude that the core of the controversy surrounding this deal involves ethical concerns. Projects of this nature often hinge on adherence to ethical standards. Identifying and managing potential conflicts of interest, ensuring a fair and competitive process, and providing equal opportunities for all qualified entities are fundamental. Ethical behavior is crucial as it ensures that those evaluating the proposals do not exploit legal loopholes or engage in dubious schemes to influence the outcome. Similarly, it prevents oversight committee members from ignoring quality issues or compromising standards, even if such issues may not be immediately visible to those without specialized knowledge in the construction industry. Upholding ethical principles is essential for maintaining the integrity of the process and ensuring that the project serves the public interest effectively.  


Finally, planning for long-term sustainability is crucial to ensure that infrastructure projects remain effective and relevant over time. This includes planning for maintenance and operation, and designing the project to adapt to future changes and challenges. We must avoid repeating past mistakes, such as those seen with the expressway's inability to handle the heavy rains as a result of climate change, which led to flooding, or the leaking roofs at JKIA. To prevent such issues, the project must be executed with a strong focus on sustainability. 


By addressing these concerns, the government can enhance the benefits of Privately-Initiated Proposals (PIPs) while minimizing risks and safeguarding public interests. Given that taxpayer money, which is your blood and sweat, our blood and sweat will ultimately fund these projects, it is essential for us to stay informed and question these initiatives with a well-grounded understanding. 

Date Published : Jul 26, 2024