Scandal mongers should leave KAA alone to concentrate on its projects
What you need to know:
- I have closely followed the paper trail on this transaction and seen an audit report on the apron buses that was conducted last month at the instigation of KAA’s board of directors, long before the President made his pronouncement.
- The airlines have been getting a free service. Third, the audit conducted by the board did not make any major findings of wrongdoing.
- It is in the middle of rolling out major infrastructure projects, including a brand-new airport estimated to cost the country a massive $425 million.
I believe that President Uhuru Kenyatta was speaking in jest when he suggested the other day that the controversial apron buses at the Jomo Kenyatta International Airport could be replaced by cheaper ones from the National Youth Service (NYS).
We all know that apron buses are specialised machines that are manufactured and assembled to the specifications and safety standards stipulated by both the International Civil Aviation Organisation and the International Air Transport Association.
The pertinent issue in the whole saga is whether or not the Kenya Airports Authority (KAA) negotiated a good deal and whether the agreement signed represented value for money.
I have closely followed the paper trail on this transaction and seen an audit report on the apron buses that was conducted last month at the instigation of KAA’s board of directors, long before the President made his pronouncement.
The incontrovertible facts about the transaction are as follows: First, contrary to popular opinion, those five apron buses were not purchased by KAA. They do not sit on the balance sheet of the corporation. Neither is it a lease arrangement between KAA and the vendor — Relief and Mission Ltd.
As a matter of fact, the buses were purchased outright by the vendor with financing by the Kenya Commercial Bank. The company is a mere service provider, more or less in the vain of the companies offering ground handling or even cleaning services at the airport. On expiry of their eight-year contract, the agreement says that Relief and Mission Ltd has to leave the airport with its five buses.
GETTING FREE SERVICES
Second, as things stand at the moment, KAA has not spent a cent on the buses despite the fact that they have been in operation since November last year. The airlines have been getting a free service. Third, the audit conducted by the board did not make any major findings of wrongdoing.
The main point was that KAA was financially exposed because the management had taken too long to process an agreement with the airlines who, under the arrangement, were the ones to pay for the buses.
Which begs the question: Is Relief and Mission Ltd making a kill by charging KAA $120,000 per month? In my view, this should not be difficult to determine. All that the investigators looking at the matter have to do is to determine the vendor’s costs. How much were the buses purchased for? What were the financing costs? What was the cost of transporting the buses to Nairobi?
You then calculate the operating costs which the vendor will incur. What is the cost of operating a 24-hour bus service in terms of fuel and staff? Once you have thrashed out the costs, you can then estimate the profit margins the company is making on the deal.
In this country, what is considered as the allowable return on investment? How much money would they have made if they had invested the money, for example in a property project?
The problem is that anybody investigating the apron bus saga is unlikely to approach the matter by examining the facts. You win if you are good at backbiting and scandal mongering.
Indeed, KAA has been reduced to a playground for a vicious battle by the self-absorbed elite, who are totally consumed by narrow calculations and are incapable of appreciating the damage their games are doing to the financial health of this key national institution. We forget that KAA is in a critical situation.
It is in the middle of rolling out major infrastructure projects, including a brand-new airport estimated to cost the country a massive $425 million.
These projects are being done to fulfil our ambition to become a big aviation hub in Africa. We should be concentrating on the right questions such as how are the dwindling fortunes of Kenya Airways likely to impact on the country’s ambitious plans? How is the incessant scandal mongering around KAA likely to impact on its credit rating? How are the financiers likely to react to instability in the corporation’s management?
President Kenyatta has recently given the fight against corruption new impetus. However, his efforts risk being hijacked by modern-day McCarthysts who see in the President’s crusade an opportunity to engage in witch-hunting, kicking out non-compliant public officials on the basis of unproven allegations to replace them with their own cronies. We must remove KAA from the clutches of these greedy people.
