Why Kenya's JKIA needs massive infrastructural investments

On April 17, 2023, Jomo Kenyatta International Airport (JKIA) in Nairobi was shut down for more than eight hours following an engine failure during takeoff of a Singapore Airlines Cargo plane bound for Amsterdam. The failure led to the explosion of 11 out of 16 rear tyres and the disabled aircraft blocking the runway for almost an entire day. Initially suspected to be a bird strike, the incident required the evacuation of 100 tonnes of cargo and extensive efforts by a technical team to clear the aircraft. The Singapore Airlines Cargo flight was about to take off at about 8.10 am local time. Finally, at around 4.40 in the evening, the Kenya Airports Authority (KAA) announced the runway was clear and free for normal operations.

This incident, where the Boeing 747-400 freighter (9V-SFO) of Singapore Airlines faced engine failure at high speed, caused significant disruption to air travel at JKIA. As a result of this, several flights were redirected, including a Kenya Airways flight from New York JFK to Entebbe International Airport in Uganda. However, this diversion would not have been needed if the airport had a second runway – indicating a clear need for heavy infrastructural investment.

JKIA is a vital hub for not just Kenya but the entire East Africa region. Projections indicate that by 2055, JKIA is expected to cater to 33 million passengers and handle a million tonnes of cargo, a significant increase from the approximately 8 million passengers and 0.5 million tonnes of cargo in 2023.

This highlights the necessity for improved infrastructure, mainly the construction of a second runway at the Nairobi airport. This is where the latest announcement by the KAA of a proposed investment by Adani Airport Holdings Limited (AAHL), part of the Adani Group, an Indian multinational conglomerate, in the KAA-operated Nairobi International Airport (NBO) is getting all the attention.

📢 PRESS STATEMENT: The Kenya Airports Authority (KAA) releases an official statement on the JKIA Concession Proposal. We remain committed to enhancing infrastructure & service quality at JKIA. Read the full statement below for detailed information. pic.twitter.com/5dwjJ7i3nv

— Kenya Airports Authority (@KenyaAirports) July 24, 2024

While the Kenyan aviation and airport infrastructure is in dire need of capital investment, the KAA’s disclosure of an external private investment proposal from AAHL has come at the most inappropriate time.

Why isn’t it the most ideal time?
Though AAHL’s investment can significantly improve the airport’s existing infrastructure, protestors in Kenya are demanding a complete shutdown of the airport. On Tuesday, protesters vowed “a total shutdown” as they seize control of the airport as deadly anti-government demonstrations intensify, now entering their sixth week.

This youth-led protest that began last month after national outrage about a controversial finance bill that would have dramatically raised taxes on basic commodities. Moreover, widely shared social media posters encourage protesters to close all roads leading to JKIA.

However, authorities announced on Monday night that they had increased security at the airport and warned protestors against trespassing on protected areas. The statement also mentioned that trespassing on protected areas is a punishable offence by law. Moreover, as a result of these protests, Kenyan President William Ruto was forced to pull the bill.

On the other hand, Musalia Mudavadi, the Prime Cabinet Secretary of Kenya, also stated that though JKIA is not up for sale, it will need investments to improve its infrastructure. Additionally, Mudavadi assured the citizens that the airport is a public and strategic asset, and any potential sale would require a complete public process endorsed by Parliament. He mentioned that any claims of the airport being sold are false. However, the airport needs to be modernised, which will require significant investment, including constructing a new terminal. The previously planned Greenfield terminal project encountered challenges with contracts and litigation, leading to its stall.

While the Prime Cabinet Secretary of Kenya emphasises the urgent need for investments, AAHL’s investment can play a crucial role in improving the country’s main airport.

Will AAHL's investment be a game-changer for JKIA's infrastructure?
AAHL has put forward a substantial plan in a “privately initiated proposal (PIP)” submitted to KAA to enhance JKIA. The PIP is to develop and expand JKIA through the Build, Operate and Transfer (BOT) model of Public Private Partnership (PPP) in line with the Public Private Partnerships Act 2021.

According to sources, the proposed project as elaborated in the PIP will address major infrastructure gaps in Kenya in line with the Kenyan government’s development plan set out in Vision 2030. The Kenya Vision 2030 is a long-term development blueprint that was launched by the government of Kenya in 2008. It aims to transform Kenya into a globally competitive and prosperous country by the year 2030.

According to multiple sources, the current infrastructure is approaching saturation and poses limitations on accommodating this growth in passenger numbers and cargo volumes. However, AAHL's proposal involves building a new Passenger Terminal Building (PTB) and renovating existing PTBs. These improvements are meant to handle the expected increase in passenger capacity and provide facilities that will enhance the overall travel experience for passengers.

If the proposal is accepted, the Indian airport holdings company will also start improving the airside pavement, including adding new taxiways and rapid exits and constructing a second runway if necessary. Additionally, the company will oversee the development and operation of facilities such as hotels, offices, and convention centres.

Can this JKIA investment deal affect Kenya’s GDP?
The proposed project, which AAHL will finance to cover all short- and long-term goals, will address major infrastructural gaps in Kenya and be in line with the country’s economic development plan. With this proposal, AAHL plans to position Kenya as a regional hub for trade, tourism and commerce. Moreover, by integrating the airport’s development with the country’s overall economic goals, this East African nation is poised to leverage the airport’s potential as an economic catalyst, fostering overall prosperity and growth.

Numerous studies show that the aviation sector significantly contributes to any country’s GDP, and Kenya is no exception in this case. With direct and indirect impacts totalling around $3.2 billion, the aviation sector contributes significantly to Kenya’s GDP. It also includes close to a billion direct, $0.6 billion from supply-chain activities and $0.2 billion from employee and stakeholder spending. Moreover, the aviation industry’s positive impact on Kenya’s tourism sector contributes to an extra of $1.6 billion to the GDP and supports 257,000 jobs.

Kenya is currently in the best position to capitalise on this growth as not only Kenya, in fact, the entire East African transport sector is witnessing a huge growth fuelled by several factors like the growth in import and export of cargo, rise in the number of passengers, liberalisation of air transport regulations, and increase in investments in airport infrastructure. Moreover, initiatives like the Single African Air Transport Market (SAATM), driven by the African Union’s Agenda 2063, are playing a pivotal role in creating a harmonised air transport market across the continent. SAATM also aims to promote the liberalisation of civil aviation, thereby acting as a catalyst for further growth in the East African air transport industry.

Even in terms of cargo, Kenya’s JKIA has held an outstanding position in the past. According to the global rankings by the Airports Council International (ACI) for the year 2018, JKIA in Nairobi ranked as the second fastest-growing airport, handling 342,579 metric tonnes of cargo, just behind Chicago Rockford International Airport in the US.

In this regard, three countries stand out as major players in the East African aviation market – Kenya, Ethiopia and Tanzania. Airports in Kenya handle approximately more than half of the region’s cargo and account for around 36% of passenger movements in East Africa in 2022. Apart from JKIA, Kenya Airports Authority hosts several other airstrips and airports, including Moi International Airport in Mombasa, Kisumu International Airport, Eldoret International Airport, Wilson Airport, Malindi Airport, Lokichoggio Airport, Ukunda Airstrip, Manda Airstrip, Lamu, Wajir Airport Isiolo Airport.

With multinational companies such as General Electric, Visa, IBM, Intel and Google having their regional headquarters in Nairobi, Kenya also serves as East Africa’s diplomatic and business centre.

Will AAHL’s investment be a blessing for both JKIA and the Kenyan Government? Will this investment deal improve the country’s socio-economic status? Will this investment help the Kenyan government meet its citizen’s needs? Only time can answer that, but the authorities must take every step with the utmost care to avoid another public outrage.

Moreover, to avoid any kind of controversies and public protests, Kenya’s Prime Cabinet Secretary of Kenya also suggested, “Going forward, the Kenya Airports Authority must look at its investment programme very carefully. They must make sure everything is transparent. So, during the expansion process of the second terminal, if it is under a PPP (public-private partnership) arrangement, let it be done properly and thoroughly through the legal process. So that everybody knows what is going on. But, I want to assure Kenyans that Kenya Airports Authority is not up for sale.”