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{
    "id": 919976,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/919976/?format=api",
    "text_counter": 335,
    "type": "speech",
    "speaker_name": "Seme, ODM",
    "speaker_title": "Hon. (Dr.) James Nyikal",
    "speaker": {
        "id": 434,
        "legal_name": "James Nyikal",
        "slug": "james-nyikal"
    },
    "content": " Thank you, Hon. Speaker for giving me an opportunity to contribute to this. I will support this Report with very serious reservations. The issue starts, as you remember, with two committees in this House trying to investigate one thing. You directed that both had mandate and they could go as long as they kept their mandate. The Departmental Committee on Transport, Public Works and Housing has gone ahead. What came was a privately initiated investment plan from KQ to JKIA. This was in an effort to improve the status of KQ. We all know that KQ has many problems. One, it is leasing planes that are very expensive. Two, it is charging higher rates. The number of passengers to the passengers’ lounge are reducing. It is not competitive. Because it is a private entity, it is subject to a lot of taxes. It is subject even to charges out landing. True, that is so. But then, it was interesting that the same KQ is putting a proposal to JKIA, which was doing well. So, somebody who is having difficulty managing itself making a proposal that it will take up an entity that is running well and improve it. That was anomalous in a way. They were saying that KQ will help JKIA to introduce measures that will improve the hub. I agree that improvement of the hub is important. It is important, not just for KQ, but for the country as a whole to improve the flow of tourism and maintain the passenger flow. They also say that they can help JKIA to earn revenue not just from aerodrome activities, but also from the commercial activities that go on within the airport. If it is true that KQ can help JKIA improve this, I am asking myself: Why can it not do that to itself? If you look at what is being proposed, you will find that they propose to literally take over KQ and split it from the other functions of the KAA. The money from JKIA will not support other airports. That is selfish. I agree with the Committee that, that option was bad. The Committee proposes that they form another aviation holding company. If you look at all the things that KQ wanted to do, if they were to take over, it is exactly what this is going to do. The only good thing about it is that it is a national entity. What they are asking for is the same. So, I have reservations. When we form this holding company, which will run JKIA, KAA and KQ it is not clear how this entity is going to work. My other concern is that when this entity is formed, we are going to give it many exemptions. However, we are not told how exactly it is going to handle one of the major issue that KQ was involved in, namely the debt. We know last year we approved a huge sovereign guarantee of Kshs75 billion. In the Report, it is noted that the debt KQ is holding is Kshs23 billion. So, it seems the sovereign guarantee is going to pay that. Kenya Airways was at one time State-owned. Then it was privatised. Investors then injected money in it and it did not work. Things are not going on well. We are now nationalising it. The investors who invested their money are safe because they have a guarantee of Kshs75 billion and their debt is only Kshs23 billion. The Committee does not bring this out clearly. However, it is clear to me that the money that is going to pay off the debt is Government money. These debtors are lucky people. Ordinarily, if a private entity is failing, it will be put under receivership and the investors will know that it was a risk and they have lost. If they get anything, it will be pro-rata benefit. In The electronic version of the Official Hansard Report is for information purposes only. Acertified version of this Report can be obtained from the Hansard Editor."
}