Parliamentary Committee Seeks Status Update Of Kenya Airways Privately Initiated Investment Proposal To KAA
By PSCU
Worth Noting:
- The deal which was part of a plan to re-organise Kenya’s aviation assets into an ecosystem to make the Kenyan aviation sector more competitive failed to take off, after the withdrawal of the National Aviation Management Bill by the then Speaker on the request of the Leader of Majority.
- Led by the Committee Chairperson, Raphael Wanjala, the members noted that there was need to inform the House what strategies the ministry had put in place in the absence of the proposed legal framework, given the role the aviation sector plays in the development of the country’s economy.
- ” Principal Secretary, it is important to inform this Committee and indeed the House the alternative strategy your ministry has put in place following the withdrawal of the Bill,” Wanjala held.
A Commitee of the National Assembly has urged the Ministry of Roads and Transport to apprise the House on the status of Kenya’s long-term aviation strategy after the withdrawal of the National Aviation Management Bill 2020 which among other reforms sought to nationalize the national carrier, Kenya Airways.
The Members of the Committee on Implementation made the call when they met with the Principal Secretary, State Department for Transport, Mr. Mohamed Daghar, Kenya Airways CEO, Mr. Allan Kivaluka and the Ag. Kenya Airports Authority Managing Director, Mr. Henry Ogoye.
The lawmakers underscored the need for the House to be briefed on the matter after it emerged that the implementation of the House resolution seeking the nationalization of Kenya Airways was no longer viable.
The deal which was part of a plan to re-organise Kenya’s aviation assets into an ecosystem to make the Kenyan aviation sector more competitive failed to take off, after the withdrawal of the National Aviation Management Bill by the then Speaker on the request of the Leader of Majority.
Led by the Committee Chairperson, Raphael Wanjala, the members noted that there was need to inform the House what strategies the ministry had put in place in the absence of the proposed legal framework, given the role the aviation sector plays in the development of the country’s economy.
” Principal Secretary, it is important to inform this Committee and indeed the House the alternative strategy your ministry has put in place following the withdrawal of the Bill,” Wanjala held.
The Committee is following up on the recommendations contained in the Report of the Departmental Committee on Transport, Public Works and Housing on the Inquiry into Proposed Kenya Airways Privately Initiated İnvestment Proposal to Kenya Airports Authority.
Key among the approved committee’s recommendations was the nationalization of Kenya Airways and the establishment of an aviation holding company with four wholly owned subsidiaries.
KQ CEO however noted that the carrier had no plans to nationalize, stating that they had embarked on another project dubbed “Kifaru 2.0” which was focused on accelerating the growth of the company while improving efficiency.
“It is important for Kenya Airways to grow in tandem with the airport. We’re looking for a strategic investor to help us get additional aircraft and grow the airline”, he disclosed..
“Project Kifaru 2 is aimed at reducing operational costs and improving efficiency as well as improving the productivity of the staff and the company’s facilities. We also want to deal with cultural issues in the organization,” he added.
Committee members present however faulted the airline for the influx of flight delays and urged the airline to improve on service delivery so as to position itself competitively.
The meeting also delved into the proposed Adani deal and how it would impact on the projected growth of Kenya Airways which plans to purchase 15 aircrafts in the next five years.
Responding to members’ questions, Daghar who noted that the matter was active in court, disclosed that Adani Group had made an investment proposal of Kshs. $1.85bn covering a period of 30 years. He however was quick to add that no project agreement had been signed.
“We received a privately initiated proposal for Jomo Kenyatta International Airport in March this year. The proposal worth $ 1.85bn is set to see the roll out of infrastructure investment for a period of 30 years”, he stated.
“The matter is active in court and I wish to confirm that no project agreement has been signed”, he informed the members.
The MPs led by the Chairperson however questioned why the Ministry had not sought an alternative arrangement where the Ministry would seek a yearly budgetary allocation to the project for the next 30 years and roll out the infrastructure program itself, instead of engaging a private firm to do so.
In response, the PS explained that the government had welcomed the Adani iniative since the country is currently financially incapacitated to commit to the crucial investment.
The lawmakers called on the PS to scale up public sensitization on the deal, so as to shed more light on a number of issues that have arisen on the matter.
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