The Kenya Airports Authority (KAA) is under intense scrutiny following revelations of undisclosed contracts and agreements for leasing space to private entities.
A recent report by Auditor General Nancy Gathungu has unveiled significant irregularities in the Authority's operations, raising concerns about potential revenue loss and illegal activities within the country's airports.
The Auditor General's report highlights several critical issues, particularly the unbilled facilitation concession income balance of Ksh7.6 million.
According to Gathungu, seven facilitation firms were granted access to airport spaces to operate within the airport during the year under review. However, the KAA failed to provide any contracts or agreements between the Authority and these firms for audit review.
"Further, the balance includes a facilitation concession income balance of Ksh7,575,557. However, it was noted that seven facilitation firms were issued with airport access passes to operate within the airport during the year under review but no contracts or agreements between the Authority and the firms were provided for audit review," Gathungu stated under the Unbilled Facilitation Concession clause.
The lack of documentation raises serious questions about the basis of revenue declared by these unauthorized firms operating at the airport.
Without any supporting contract agreements, the declarations made by these firms and the legality of their operations remain undetermined.
"In the absence of contracts agreement stipulating the terms of operation, there is a possibility of revenue loss through undeclared and unremitted facilitation concession income," Gathungu warned.
This statement underscores the potential financial implications of the KAA's failure to maintain proper contractual oversight, which could lead to substantial revenue losses for the Authority.
In his report, the chairman of the Board, Caleb Kositany was optimistic that the authority had recovered and attracted revenue despite a hostile economic environment to operate and soar to full potential.
"Within the local aviation landscape, we have witnessed remarkable progress, exemplified by a substantial recovery of 103 per cent in passenger numbers compared to pre-Covid-19 levels. This resurgence has also been marked by an 8.6 per cent growth in aircraft movements and a 0.6 per cent upswing in cargo movements in comparison to the previous year ending June 30, 2023."
"KAA has exhibited robust financial performance, with revenues soaring by an impressive 27 per cent to Ksh17.02 billion. There were prudent cost management practices within the year however, to enable the construction of Terminal 3 at JKIA the Authority through a planned negotiation and approval by the cabinet a write-off of Ksh4.6 billion was factored during the period. This therefore made the Authority finally register a pretax loss of Ksh3.7 billion," Kositany said in a statement. By
