GOR: Adani-JKIA deal not a priority

Public-Private Partnership agreements have been used world over to cater for urgent development needs that could not have been achieved due to scarcity  of resources, budget deficits, or numerous competing interests.

PPP in itself serves a very important role on condition that the funds or services provided by the private investor goes through due diligence  appropriately channelled and well implemented.

Adani-JKIA deal is one of the PPPs intended to offer repair and maintenance as well as build a new Greenfield terminal in the busy airport. KAA projects that with that development in place, it will be in a position to serve over 20 million passengers by 2035.

The deal has attracted lots of public scrutiny.

I add my voice us calling for abandoning of the deal and requesting the transport ministry to reconsider country priorities.

Among the concerns that worry me with the deal are:

Non-disclosure of the contents of the contract

A 30 year agreement is a deal that can span across 6 presidencies at most and at minimum 3. It is also close to a full adult life of most Kenyans. A contract binding a nation for such a period must be exposed to non-biased scrutiny , possible adjustments suggested and potential approval granted before private investors set foot on the project. 

When the CS Transport appeared before the senate committee without any documentation on the deal, yet he was aware that it was the subject matter, it confirms that the contracting institution is comfortable not disclosing the contents or they just didn't see the need to. Any contracting body must be reminded that they are acting on behalf of the members of the public.

Disclosure of the contents of the contract would enable better appreciation of the investor's intent especially in regards to what the overall benefit of the agreement is to the general public, what the PPP Act 2021 refers to "local content".

Debt burden

Kenya is grappling with a 10Trillion debt. Getting a PPP to the tune of 230B is a shortcut to acquiring another debt while fooling the general public that the debt ceiling has not been touched! While development is necessary, it would make sense to explore options of growing without too much strain on the tax payers.

One investor interested in three ministries

From engagements with senate committee, one private investor is alleged to have interest in three(3) major ministries in Kenya: Transport, Health and Energy. If Adani is allowed to run with the three(3) proposals concurrently, the country is exposed to the risk of paralysis should any business uneventualities happen to Adani. It would be prudent to expand the number of private investors after assessing their capabilities.

AIG on Adani feasibility

AIG, the consulting firm on Adani's feasibility and viability has noted the following: 
-Requisition for tax exception. Adani is proposing a 21 percent return on Equity on one hand and total exception from tax! It is also requesting to collect the same revenue they don't want taxed? 
-The private investor is requesting to take up both repair and maintenance works as well as construction of the new Greenfield terminal. The Jubilee government in 2013 initiated the new terminal construction and has already paid 4.5B to the Chinese contractor whose contract was stopped. It would be prudent to focus on the completion of the construction before signing other works.

Adani deal should be rejected. It's not a priority.

Ms Gor is a Kenya National Congress Nominated Member at the Kisii County Assembly