We have managed to uncover some of the shocking terms in the agreement with Adani Airport Holdings Ltd.
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The agreement with Adani Airport Holdings Ltd specifies that any interruptions due to court actions, parliamentary decisions, or protests will require Adani to be compensated for both losses and anticipated profits.
Disputes will be resolved through international arbitration in London, with hearings held in Mauritius
Under Adani’s proposal, KAA employees may need to renegotiate their contracts, with potential job losses for some.
Adani will hire only a portion of the current workforce under new terms and conditions, and seeks to employ non-Kenyan workers
Tax Exemptions and Financial Arrangements:
The concessionaire is eligible for tax breaks on corporate income for any 10 years within the first 15 years of the Airport and CSD Concessions.
All financial matters, including revenues, expenses, insurance, and security deposits, will be transferred to the concessionaire.
Adani is also seeking favorable tax policies, including exemptions from corporate tax for specific years
On the Air Passenger Service Charge Act
The Air Passenger Service Charge Act sets a service charge of USD 50 for international flights and Sh600 for domestic flights.
Revenue from this charge is divided among Kenya Airports Authority (KAA) (60% for international and 50% for domestic flights), the Kenya Civil Aviation Authority, and the Tourism Promotion Fund.
Adani’s proposal includes amending this Act to allow it to set charge amounts and retain the share usually allocated to KAA. The concessionaire will also manage the collection of these charges.
Adani Airport Holdings Ltd will take control of all non-aeronautical assets at JKIA from the Effective Date.
The company will handle all operations and financial transactions related to the airport.
Adani plans to set its own service charges and ensure an equity (IRR) of 18%, which is essential for the project's success and profitability.
Adani plans to invest ($1.85 billion in upgrading (JKIA).
This investment aims to significantly boost revenue, projected to rise from $163 million in 2025 to $1.2 billion by 2054.
The proposal includes a new passenger terminal, a second runway, and refurbishing existing facilities, marking the first major overhaul of JKIA in 46 years.
Revenue Sources:
As the concessionaire for JKIA, Adani expects to earn revenue from:
—Aeronautical Charges:
—Landing fees
—parking fees
—boarding bridge charges
—passenger service charges.
Non-Aeronautical Sources:
—Duty-free shops
—Food and beverage outlets
—Retail stores and vending machines
—Lounges
—Advertising and sponsorships
—Parking and transportation facilities
—Hotels and transit
Topic: JKIA Go slow. (Read 2352 times)