Boardroom crisis deepens over airport tender

The controversy surrounding expansion plans for the Jomo Kenyatta International Airport in Nairobi has taken a new turn amid reports that an international firm bribed a senior government official to try to influence the tender.

The Sunday Nation has been reliably informed that the official – whom we cannot name for legal reasons – has received a $1 million (Sh85 million) bribe from the company.

The firm, which fell by the wayside in the tendering process over a technicality, reportedly wired the money to a Nairobi law firm to cover its tracks, and would like the process repeated.

Powerful political figures are also said to be fuelling the battle for the lucrative contract — one of the biggest under the Kibaki presidency.

The revelations came as the Kenya Airports Authority appeared headed for a crisis after managing director Stephen Gichuki bowed not leave office following a Thursday night board decision to send him on compulsory leave.

Mr Gichuki has instead reached out to the Office of the President, the Office of the Prime Minister and the Inspectorate of State Corporations for direction on the decision, which he said was made in contravention of the law governing parastatal board meetings.

Mr Gichuki stood his ground even as Kenya Airways managing director Titus Naikuni waded in and called for a speedy conclusion to the controversy over the construction of a new terminal adjacent to the Jomo Kenyatta International Airport.

“The significance of this project to our continued profitability as an airline cannot be under-estimated. Kenya Airways and its partners in the SkyTeam alliance will contribute 70-80 per cent of the traffic to this new terminal. The cost of constructing the new terminal will be borne by the passengers that we will put through the new terminal. It is therefore logical that we must be listened to and be seen to be heard,” said Mr Naikuni in a statement sent to newsrooms on Saturday.

“Aircraft are already starting to arrive and we should, in the interests of our country, put our heads together and get in place a cost-effective working airport terminal without personalising issues.”

According to KQ, some of their suggestions had not been taken into account. But Mr Gichuki countered the KQ statement and said that the Greenfield project was developed on the basis of the airline’s passenger number projections back in 2010.

“They are free to critique, but that does not mean it cannot work. Their own consultants have said as much. In any case, they have not challenged the designer on the issues they may have,” Mr Gichuki said.

Mr Gichuki said that the stage for some of the issues raised by KQ since the contractual designs had not been arrived at.

“I thought they would be complaining that it is an oversupply of capacity. Twenty million passengers a year will take long to utilise and there is room in the design for future expansion,” Mr Gichuki said.

The high level intrigues bedevilling KAA point to unseen but powerful political hands that appear to be driving the agenda at the parastatal over the battle for the Sh56 billion tender for the expansion of the airport.

In the latest twist of vicious boardroom battles that stretch all the way to Cabinet, the KAA board wrote to Mr Gichuki on Friday – following a marathon meeting that went into midnight Thursday – suspending him from office over the airport expansion project.

But the MD shot back in correspondences seen by the Sunday Nation that he was never given a hearing and that it was improper to discuss him under the guise of a different agenda.

“It follows, therefore, that in absence of a properly constituted board meeting, your decision as enumerated in the letter and any other decision do not stand,” Mr Gichuki wrote in a letter to board chairman Martin Wambora.

Mr Wambora called the board meeting last Thursday, at which point the Sunday Nation contacted him with an inquiry on whether the meeting was procedural and if the agenda was to sack Mr Gichuki.

Mr Wambora told the Sunday Nation that he had called a board meeting according to the law to find ways of cooling the rising temperatures at the parastatal. About 36 hours later, the board resolved to send the MD on compulsory leave.

The State Corporations Act provides the board can only meet if they had so resolved at a previous meeting or if the chairman “in consultation with the CEO” calls for a meeting.

Mr Gichuki has countered that he was not consulted and had warned ahead of the board meeting that the meeting, whose notice should be issued by the company secretary, was not properly convened.

Another intriguing strand is that the Thursday board meeting’s agenda was marked as Greenfield project but was turned around to target the MD and send him on compulsory leave.

It is on the basis of the above irregularities that Mr Gichuki wrote back seeking direction from higher government offices about the midnight decision taken by the board.

The decision to send Mr Gichuki on compulsory leave adds to other controversial decisions that have marked the Greenfield project since January 10 this year when Tranport Minister Amos Kimunya ordered its cancellation.

On Saturday, Mr Naikuni said that a speedy conclusion to the raging controversy is critical to the successful implementation of KQ’s Project Mawingu plan under which the airline is seeking to have over 100 passenger and cargo aircraft within the next nine years.

The first year of the 10yr plan has already passed by and aircrafts are starting to arrive with one due next week and will be followed by one every month for the next 8 months, thus the urgency to create the long overdue capacity at JKIA.

“The matter can only be effectively resolved by involving all key industry stakeholders. The Transport Minister appointed inclusive steering committee, which Kenya Airways fully supports, is the best way forward to steer the implementation of the project,” Mr Naikuni said.

Mr Gichuki on his part maintained that KQ had been fully involved, that the project was done to cater for the airline’s expansion and based on their growth projection.