How Kenya’s kleptocracy plans to seize the multi-billion aviation industry

Kenya’s massive Sh320 billion aviation industry which supports the livelihoods of more than one million Kenyans is on the threshold of being forcibly taken over by a shadowy group of state operatives who have devised a plan to hijack both the Kenya Airports Authority and Kenya Airways and merge them into a single state institution.

The diabolical plan which is being executed through the National Assembly Transport Committee and its puppet chairman David Pkosing has already prepared a National Aviation Management Bill, 2020 that is still at committee stage and due to be introduced in the plenary anytime now.

The bill proposes that President Uhuru Kenyatta will personally chair a powerful National Civil Aviation Council which will oversee Kenya Aviation Corporation whose board the President will appoint, and whose members will be drawn from the CEOs of the entities that will be formed under KAC, and whose board members shall all be presidential appointees.

Diplomats who have scanned the hurriedly drafted bill were have questioned Kenya’s inverted priorities in economic management asking why the president would be happy to chair NCAC to oversee management of flight arrivals, departures and delays, yet he is less enthusiastic to formulate an equally powerful organisation which he can chair to implement measures to eliminate grand corruption which Ethics and Anti-Corruption Commission says costs the economy as much as a trillion shillings or a third of the national budget every year.

In the process of irregularly taking over and monopolizing aviation industry in Kenya, the kleptomaniac state operatives will be heaping catastrophic consequences on the national economy while at the same time unwittingly creating massive joblessness. What is worse however, is the the move shall result in a greatly reduced tax base given that the new entities is being given tax subsidies.

Too often in Kenya, many hands freely and repetitively dip into the public coffers with impunity while public services which depend on taxes paid remain undelivered.

With this new aviation bill, Kenya is likely develop into a system of economic kleptocracy never seen since independence as the sector joins key sectors of the national economy that are being shepherded into the hands of well-connected cartels aided by the deepstate.

In a move that appears to have the blessings of top state leadership, the bills aims to re-nationalise KAA and KQ through a compromised parliamentary committee and use a hurriedly enacted law to commit economic atrocities on the Kenyan economy through the monopolisation of the aviation industry by well-connected wheeler-dealers.

Experts have warned of an emerging man-made crisis in the aviation sector which is reeling from the effects of the COVID-19 pandemic amid the chaos caused by an international shutdown of air travel.

Kenyan ruling elites who have in recent months ransacked various sectors of the economy including the health, agriculture, energy have now set their eyes firmly in the skies with the planned law has distorted the country’s established norms of doing business.

Interestingly, the Office of the Attoney General is reported to have declined to be involved in drafting the National Aviation Management Bill, 2020.

Suspicion is rife that Transport Committee Chairman David Pkosing usurped the AG’s role and had the bill drafted by commercial lawyers who have vested interests and are in bed with cartels and deep state keen on taking over the aviation sector.

Legal experts who have examined the bills have poured called water on the entire proposed law arguing it will cause not just economic problems but will also clash with existing statutes including the constitution.

Critics point to KQ’s perpetual insolvency and the fact it does not known the aircraft in its fleet. The same KQ has recorded losses over the years and has received more than Sh100 billion tax-payer government bailouts.

The new law proposes tax subsidies and exemptions from the public procurement law to allow to freedom of expenditure of unlimited publicly funded entities to purchase, sell, lease or maintain fleets not owned by the public without any independent scrutiny. No single state department enjoys this privilege.

As if this is not enough, the Transport Committee has proposed that Kenya Aviation Corporation be allowed freedom to borrow and lend money. In other words, KAC to also act as a financial institution outside the regulations of the Banking Act and without Central Bank supervision as it freely borrows and lends tax payers money.

Another worrisome aspect of the law is the brazen grabbing of regulatory powers vested on the Kenya Civil Aviation Authority by NCAC. Technically the president wants to oversee civil aviation without any board representative from civil aviation and without any expert capacity to undertake such a role.

The implication if this is the possible blacklisting of Kenya by International Civil Aviation Organization and International Air Passengers Association.

The drive toward monopolization of the aviation sector is seen in the proposed law to introduce anti-competition regulation which amongst others gives KCA unchecked powers to singularly determine aviation user charges fees, operator rates and other unspecified charges specified.

It is feared this clause will be abused and be used to tilt the market to favour KQ. In the process, industry operating costs will be driven up by subjecting KQ’s competitors to unfair and unregulated charges.

It is also proposed that KAC will take over managment of KQ, KAA, and Aviation Investment Corporation will report to the group CEO, and all airports of Kenya including JKIA will fall under KAC.

Aviation Investment Corporationwill run flight training schools and undertake maintenance of KQ aircraft. It will also be used “to acquire susidiaries”. It is not clear how this business model will operate using public resources.

This is not only introduces unnecessary bureaucracy it can potentially introduce personal disagreements and board wars due to vested personal interests arising from within the lucrative industry.

As it oversees the myriad of entities under its diect suppervision, the Kenya Aviation Corporation board can easily be overthrown by these CEOs from the said entities who sit in the board that supervises them as majority members.

Industry players have called upon members of parliament to rise up and defend the potential loss of jobs by rejecting this ill- conceived piece of legislation.

Watch dog organizations like the Competition Authority (CAK) and the Institute of Economic Affairs (IEA) should also rise up and point out the perils of allowing ill-equipped Transport Committee of the National Assembly from being used by unscrupulous business persons to kill Kenya’s aviation industry.

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