MPs stop Kenya Airways' plan to takeover JKIA

Friday February 22 2019

JKIA

Kenya Airports Authority boss Jonny Andersen responds to questions from MPs on February 19, 2019 at Parliament buildings concerning the proposed takeover of JKIA by Kenya Airways. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP 

SAMWEL OWINO
By SAMWEL OWINO
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Parliament has blocked the proposed takeover of Jomo Kenyatta International Airport (JKIA) by the loss-making Kenya Airways.

The National Assembly’s Public Investments Committee on Thursday ordered an immediate halt to the process even as it called for a forensic audit by the office of the Auditor-General on how the deal was reached.

The MPs said the takeover plan in which KQ would tentatively run JKIA for 30 years is suspect and a case of top forces conniving to rip off the taxpayers.

The lawmakers added that Kenya risks losing billions of shillings in revenue should the deal be allowed to proceed.

AUDIT

Committee chairman Abdullswamad Nassir said everything about the deal is shrouded in mystery and that Auditor-General Edward Ouko needs to unearth the financial transactions involved.

“Everything about this deal should stop because, if [we are] not careful, we are going to rush over something that it is going to affect [future] generations for decades,” Mr Nassir said.

He directed Kenya Airports Authority (KAA) to furnish the Auditor-General with all the documents regarding the deal for a comprehensive audit.

“If we don’t stop it now we will soon be here again talking about the same thing,” Mr Nassir said.

Nandi Hills MP Alfred Keter said the process should not stop. “It is illegal and a scandal in the offing. Even the Sh15 million that has been paid to the transaction adviser should be recovered.”

NEGOTIATIONS

In a stormy session with KAA Managing Director Jonny Andersen yesterday, it emerged that KAA did not initiate negotiations on the takeover.

Mr Anderson told the committee that KAA did not see the Cabinet memo that approved the takeover, but he acknowledged that they received a letter from principal secretaries Paul Maringa and Esther Koimett confirming the Cabinet decision.

Both Mr Maringa and Ms Koimett are set to appear before the committee on Tuesday next week.

“I asked for the Cabinet memo and I was told that it is confidential. I don’t know whether that is true. This is a key asset for Kenya; it is one of the most important in East Africa.

"We cannot afford to handle it lightly. We have to do due diligence and also look for alternatives,” Mr Andersen added.

“We have never written a letter to the Cabinet or to the Cabinet secretary to discuss the merger and management of operations at JKIA,” the MD said.

DEBT

He was ready to resign if was coerced into doing certain things. “We cannot afford this because it is a complex transaction; it’s about Kenyans,” he said, adding that PS Maringa communicated the Cabinet memo to KAA’s board meeting on KQ taking over JKIA in a policy statement being implemented by the “highest office in the land”.

“We are now being told, through the minutes of KAA’s board, that the highest office is in charge of this project. They want to use KAA to salvage their banks since KQ is sinking,” Budalang’i MP Raphael Wanjala said.

Wajir East MP Rashid Amin questioned if KAA is supposed to just follow instructions from principal secretaries without seeking approval of the board.

It also emerged that there was an audit by KPMG and that lawyers advised KAA against the deal, despite Sh15 million having been paid for the transactions.

Kenya Airways is currently choking in debt. It owes CBA Group Sh3.1 billion, NIC Sh2.1 billion, Equity Bank Sh5.2 billion, National Bank Sh3.5 billion, Co-operative Bank Sh3.3 billion, DTB Sh2.1 billion and KCB Sh2.1 billion.

KAA, on the other hand, is doing well financially.