Kenya Airways envisions new unit to manage JKIA for 30 years

Kenya Airways #ticker: KQ has proposed the creation of a dedicated operations management subsidiary at Jomo Kenyatta International Airport (JKIA) for a 30-year concession period.

KQ's plan, contained in its Private Investment Proposal (PIIP), includes the creation of a Special Purpose Vehicle (SPV) – a unit of a company protected from the financial risk of the parent company – to operate , maintain and develop JKIA.

"It (SPV) is created under the conditions set out in Section 59 of the Public-Private Partnership (PPP) Act," said Jonny Andersen, KAA's chief executive officer.

The PIIP is required to meet defined criteria, follow regulatory steps and obtain approvals from competent regulators.

"KAA's board of directors and management have therefore appointed transaction advisers to provide advice on the PIIP, including in-depth due diligence and PIIP badessment. MMC Africa Law has been chosen as a transaction advisor, "he said on Wednesday.

This responds to previously expressed concerns about the interests of KQ's property, which includes private investors unlike JKIA, which the government wholly owns through KAA.

According to Mr. Andersen, KAA's Board of Directors and management will review the proposal based on the guidelines of the Plant Protection Products Act, which provides for public participation.

The series of events for stakeholders will be held in Kisumu, Eldoret, Mombasa, Wajir, Lodwar and Nairobi starting on Wednesday and lasting until mid-February.

"As one of our most valuable stakeholders, it is imperative and important to gather the views and feedback of all relevant stakeholders in KQ's proposals in the PIIP," said M Andersen.

He added that due diligence on the state of KAA and the national carrier was underway, as was the evaluation of KQ's proposal.