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Kenya’s Parliament to Nationalize Country’s Main Airline Kenya Airways

A failed expansion drive and a slump in air travel forced it to restructure $2 billion of debt in 2017

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Kenya, Airline, Parliament
FILE - Kenya Airways planes are seen parked at the Jomo Kenyatta International airport near Kenya's capital Nairobi, April 28, 2016. VOA

Kenya’s parliament voted on Tuesday to nationalize the country’s main airline Kenya Airways to save it from mounting debts.

The loss-making airline, which is 48.9% government-owned and 7.8% held by Air France-KLM, has been struggling to return to profitability and growth.

A failed expansion drive and a slump in air travel forced it to restructure $2 billion of debt in 2017. The airline later proposed taking over the running of Nairobi’s main airport to boost its revenue.

Parliament’s transport committee, however, rejected that plan, recommending instead the nationalization of the airline in a report debated by the national assembly on June 18.

Kenya, Airline, Parliament
Kenya’s parliament voted on Tuesday to nationalize the country’s main airline Kenya Airways to save it from mounting debts. Pixabay

In a voice vote taken on Tuesday afternoon, the majority of lawmakers in the chamber voted to accept the report.

Kenya Airways Chairman Michael Joseph told Reuters the vote was “great news.”

“Nationalization is what is necessary to compete on a level playing field. It is not what we want, but what we need,” he said, referring to competitors such as Ethiopian Airlines which are state-run and profitable.

Air France-KLM could not immediately be reached for comment.

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The government will now draw up an implementation plan, with clear time lines, said Esther Koimett, the principal secretary at the ministry of transport.

“Parliament is our boss … we will obviously take the recommendations of parliament,” she told Reuters.

Kenya is seeking to emulate countries like Ethiopia which run air transport assets from airports to fueling operations under a single company, using funds from the more profitable parts to support others, such as national airlines.

“The government is keen to take a consolidated view of aviation assets of the country in order to make sure they work in a coherent and efficient way to support the (Nairobi aviation) hub,” Koimett said.

Kenya, Airline, Parliament
The loss-making airline, which is 48.9% government-owned and 7.8% held by Air France-KLM, has been struggling to return to profitability and growth. Pixabay

The committee’s report proposes that Kenya set up an aviation holding company with four subsidiaries, one of which would run Kenya Airways. Another arm of the holding company would operate Nairobi’s main international airport.

The committee’s report also recommended the holding company be given tax concessions for a period to be determined and that it be exempted from paying excise duty on all goods, including jet fuel.

Koimett dismissed concerns that nationalization could lead to further mismanagement. Kenya’s state-owned enterprises sector is riddled with corporate corpses and near failures caused by theft and poor management over the decades.

“Implementation is really the key thing … Ultimately all these things have to do really with ensuring that we get the right people in the right places,” she said.

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($1 = 103.7000 Kenyan shillings) (VOA)

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Indian Parliament Imposes Ban on E-Cigarettes

Moving the Bill, Harsh Vardhan clarified that e-cigarettes are not tobacco products

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E-Cigarettes
E-cigarettes are electronic devices which can enable the delivery of all intoxicating substances. Predominantly, they are used for nicotine delivery, which is one of the most addictive elements known. Pixabay

Paving the way for a complete ban on E-Cigarettes, the Rajya Sabha on Monday passed the Prohibition of E-Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Bill, 2019, by voice vote.

The Bill has already been passed by the Lok Sabha for replacing the ordinance promulgated last September.

Replying to members on the Bill, Union Health Minister Harsh Vardhan urged them to pass the legislation unanimously in the larger interest of the children.

“There is evidence now that e-cigarettes are very harmful. They can become a bigger menace than tobacco one day. So, the intention of the government has been to nip the problem in the bud itself,” the minister said.

While most members in the House supported the ban on e-cigarettes, some of the MPs wanted to know why conventional cigarettes aren’t banned as they are equally or even more harmful.

Many opposition members also expressed reservation over bringing the ordinance and introducing the Bill without sending the same to a Parliamentary Standing Committee.

On why all tobacco products are not being banned, Harsh Vardhan said that he would be the happiest person if that happens.

“You see, in a country as vast as India, once a particular product has a very big consumer base and social acceptance, it is in fact very, very difficult to ban it,” the minister said.

On the reasons for bringing the ordinance, the minister said that apart from other things, some of the big tobacco companies changed their names and started making plans to enter India.

E-Cigarettes
Paving the way for a complete ban on E-Cigarettes, the Rajya Sabha on Monday passed the Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Export, Transport, Sale, Distribution, Storage and Advertisement) Bill, 2019, by voice vote. Wikimedia Commons

“They had made full preparations. There was an announced entry of a company called Juul, one of the leading global manufacturers of e-cigarettes, in December 2019. It was probably one of the most imminent concerns that worried all of us,” he said.

Participating in the discussions, Trinamool Congress leader Santanu Sen argued for banning all tobacco products as all of them were harmful to human health.

“Of course, by this Bill we are preventing a person from committing suicide by jumping from the fifth floor, but we are also keeping the more affordable and accessible 10th floor wide open to jump from,” Sen said to highlight the serious health concerns posed by conventional cigarettes.

The Rajya Sabha MP, also national president of Indian Medical Association, noted that a normal cigarette constitutes 700 chemicals out of which 250 are very much harmful. Further, out of this 250 chemicals, 60 cause cancer while all of them are carcinogenic.

“Smoking increases coronary heart disease by 2 to 4 times. It increases stroke by 2 to 4 times. It increases lung cancer by 25 times and it increases the probability of COPDA (Chronic Obstructive Pulmonary Disease) by 13 times,” the Trinamool leader said.

Congress MP B.K. Hariprasad said that he did not support e-cigarettes but opposed the way the Bill had been brought. He also suspected the intention of the government behind bringing the ordinance and subsequently the Bill hurriedly.

“People are smelling a rat in the way this Bill has been brought hastily,” Hariprasad said while making a case for banning all tobacco products as all of them were equally harmful.

He said the government should not succumb to tobacco lobbyists.

Senior CPI leader Binoy Viswam also raised questions around the manner in which the bill had been introduced as no survey or study was carried out before bringing the legislation.

Replying to members on the Bill, Harsh Vardhan said that all his life he had fought against tobacco lobbyists and therefore members should not have any suspicion on his intention.

Congress MP Rajeev Gowda said that the ban has to be a last resort rather than the first resort which is what has been the practice in this particular context.

“A ban or prohibition, as we have seen everywhere, results in underground activities. It results in criminalisation of the society. It results in the creation of a mafia that deals with the underground activity,” Gowda said while participating in the discussions on the bill.

E-cigarettes are electronic devices which can enable the delivery of all intoxicating substances. Predominantly, they are used for nicotine delivery, which is one of the most addictive elements known. This also includes all forms of electronic nicotine as well as non-nicotine delivery devices such as e-hookahs and heat-not-burn products.

Moving the Bill, Harsh Vardhan clarified that e-cigarettes are not tobacco products.

“Any comparison about their adverse health impacts with tobacco is misplaced. There is also no conclusive evidence to suggest that e-cigarettes are less harmful than conventional cigarettes. On the other hand, there is definitely an emerging evidence all over the world that e-cigarettes have significantly harmful effects on health,” the minister said.

E-Cigarettes
The Rajya Sabha MP, also national president of Indian Medical Association, noted that Apart From E-Cigarettes, a normal cigarette constitutes 700 chemicals out of which 250 are very much harmful. Further, out of this 250 chemicals, 60 cause cancer while all of them are carcinogenic. Pixabay

Highlighting the harmful effects of nicotine delivered by e-cigarettes, the minister said that nicotine sulfate was once approved to be used as a pesticide by the agriculture department.

“Recently, even that approval has been withdrawn considering its toxicity. Therefore, it is a chemical that is not even fit to be used as a pesticide. That is the latest about nicotine.

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“It is the most addictive substance currently known in the world and is even more addictive than heroin. There is currently no known treatment for nicotine-addiction anywhere in the world,” Harsh Vardhan said. (IANS)