Adani Enterprises has set up a Kenyan subsidiary as it steps up its push to take over the running of Jomo Kenyatta International Airport, amid continued opposition among transport workers to the takeover by the Indian conglomerate.

The flagship company of Gautam Adani's sprawling corporate giant incorporated "Airports Infrastructure PLC (AIP)" in Kenya on August 30, according to a filing with the National Stock Exchange of India in Mumbai.“AIP is incorporated to take over, operate, maintain, develop, design, construct, upgrade, modernise and manage the airports,” the filing reads.

The Kenyan subsidiary was set up by an Abu Dhabi group called Global Airports Operator, itself a subsidiary of Adani Enterprises, which will own 100 percent of AIP's share capital. As part of the incorporation of the Kenyan company, Adani issued share capital of Ksh6.75 million, consisting of 6,750 shares at Ksh1,000 each.

While Adani noted that AIP has yet to commence operations or generate revenue, the establishment of a Kenyan airport subsidiary is a sign of its continued commitment to the JKIA takeover, even as domestic opposition to the deal grows.

Kenya Airports Authority workers went on strike at JKIA on Monday to oppose Adani's proposal to take over the airport, amid ongoing concerns over job security.

Adani submitted a privately initiated proposal (PIP) to the Kenya Airports Authority (KAA) earlier this year to operate JKIA under a 30-year concession. Adani's financial proposal shows that $750 million will be spent on the development of a new terminal building, associated apron and taxiway system and two rapid exit taxiways. This is expected to be completed by 2029.

A further $92 million would be used to improve the taxiway system, add two more rapid exit taxiways and construct other related facilities such as additional remote aircraft parking stands.

This phase is expected to be completed in 2035. Adan is also proposing to spend $620 million on the development of new facilities, with the company adding that this will be done carefully to ensure seamless integration with the existing infrastructure.

The Indian company is proposing a city-side development consisting of hospitality, business centres and other amenities accessible to travellers and city residents.

The company wants to operate the airport for 30 years and transfer it back to JKIA at a value to be determined by the two parties, giving it an internal rate of return (IRR) on equity of 18 percent. IRR is a financial analysis metric used to estimate the profitability of potential investments. An investment with the highest likely IRR would be considered the best.

During the 30 years, Adani will be entitled to set the dollar-denominated charges to airlines and other users for its services at JKIA in a way that guarantees it an 18 percent IRR.

Adani estimates that the targeted JKIA upgrade would see revenues jump from $163 million in 2025 (with $47 million going to the government) to $290 million in 2030, giving the government $52 million.

The revenue will rise to $740 million in 2045, with the government's share at $70 million, and reach $1.2 billion in 2054, earning the state $76 million. JKIA's existing Terminal 1 has five segments with a total built-up area of about 70,000 square metres. The airport also has another Terminal T2 of 10,000 square metres for low-cost airlines.

Projections contained in the Adani proposals show that JKIA is expected to handle 33 million passengers and one million tonnes of cargo by 2055, up from around eight million passengers and 0.5 million tonnes of cargo at the end of 2023. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).