All Kenya Airports Authority (KAA) employees will continue working under their current terms should India’s Adani Airport Holdings win its bid to run Kenya’s largest airport for 30 years, signalling a softened position after the workers’ standoff.
Adani’s revised key concession terms to KAA, in which it intends to spend $1.85 billion (Sh238 billion) to upgrade and expand Jomo Kenyatta International Airport (JKIA), shows the firm has now committed to absorb all the current workforce for two years before offering them new contracts.
This marks a departure from the initial proposal that was to see Adani immediately force KAA employees into renegotiated contracts and only absorb a certain percentage of them while releasing others.
“The proponent (Adani) expects a time period of two years from the effective date of the concession agreement for the transition of JKIA operations from Authority (KAA) to the concessionaire (Adani),” the revised terms read in part.
“The concessionaire shall make an offer to all such Authority employees, on terms and conditions that are similar to their existing employment.”
Adani is even projecting that salaries and wages of existing KAA employees will grow steadily at about five percent, with a 10 percent increase at the start of the concession and even witness a “slight increase” in the number of employees at the beginning.
However, Adani says, before the expiry of the transition period, it will make an offer to all JKIA existing employees to transfer their employment from the airport on new terms.
KAA’s latest annual report shows it had 1,801 employees at the end of June 2022.
According to the revised document, upon the expiry of the two-year transition period, KAA employees who would not have accepted Adani’s employment offer “shall be transferred out of the JKIA and redeployed by the Authority.”
Adani’s softened stance follows weeks of standoff with KAA employees, who have staged several days of demonstrations over what they termed as unfair proposals.
The Indian firm had initially stated that it would offer employment to a “mutually agreed percentage” of current KAA employees on terms and conditions set out in the concession agreement and would even hire non-Kenyan employees on secondment or contract basis.
The initial proposal had rattled KAA workers as it pointed to potential job losses and an unknown new remuneration structure.
Adani is seeking to generate $163 million (Sh21 billion) from JKIA in 2025—the proposed first year of operation—being more than the Sh13.3 billion that KAA made from all its operations in the financial year ended June 2022.
The firm wants to run the airport for 30 years and transfer it back to JKIA at a value to be determined by the two parties, but with a guaranteed internal rate of return (IRR) on equity of 18 percent. IRR measures the profitability of an investment.
