Stakes for the controversial Indian conglomerate, the Adani Group to be awarded lucrative government contracts spanning decades were today cemented amid growing public outrage over the shadowy deals shrouded in deep secrecy after the former Prime Minister and opposition leader whose Orange Democratic Movement (ODM) party has since been incorporated in the president William Ruto’s administration through the Broad-Based-Government framework came to the defence of the foreign entity.
Through their Kenyan subsidiaries, Adani Airports Holdings Limited (AAHL), Adani Energy Solutions Limited, Adani group owned by Indian billionaire Guatam Adani engaged in Jomo Kenyatta International Airport (JKIA) leasing and power lines expansion multi-billion deals each spanning 30 years respectively under Public-Private Partnership (PPP) framework which has since been challenged in court as flawed.
Today, Raila defended the Indian multinational conglomerate Adani Group, which is currently linked to several high-profile projects in Kenya describing the firm as a reputable company with a strong track record in PPP projects, distancing the firm from the recent controversy.
Speaking on the sidelines of the ODM delegates conference in Mombasa, Raila recalled his first interaction with Adani in 2010 during his tenure as PM when the conglomerate expressed interest in in- vesting in Kenya.
“Adani is an innocent and reputable company that should not be condemned for mistakes it has not committed…The Adani conglomerate is worth over $200 billion. If individuals made mistakes, let them own up, but we should not condemn companies that are merely conducting normal commercial activities.” Raila said.
Raila’s defence of the Indian company comes against the backdrop of fervent criticism of the contracts from a cross-section of leaders, mainly members of the opposition.
At the forefront of the criticism are Raila’s known allies such as Kisumu governor Prof Anyang Nyong’o and Kisii senator Richard Onyonka.
Onyonka was among the first leaders to blow the whistle on the Adani deals while Nyong’o recently penned an article in a local daily hitting out at the deal.
Incidentally, Nyong’o, who was recently elevated to become ODM party leader, was among the people who flanked Raila as he defended the Indian firm.
Raila highlighted a number of Adani’s projects in India. He recalled how he was introduced to the company’s infrastructure initiatives by Narendra Modi, who was then the Chief Minister of Gujarat.
The former PM pointed to projects such as a port, power plant, railway line, and airstrip that Adani developed on a swamp, referencing its transformation of Mumbai’s international airport from a dilapidated facility to a world-class hub.
While acknowledging the concerns surrounding Adani’s involvement in Kenya’s energy sector and the proposed Jomo Kenyatta International Airport ( JKIA) deal, Raila urged Kenyans to separate legitimate concerns from misinformation.
He explained that Kenya benchmarked its PPP framework with India, adapting Gujarat’s model, which was introduced to the Kenyan delegation by Prime Minister Modi. However, Raila lamented that Kenya’s adaptation of the model had been “adulterated”.
He called for tailor-made PPP models that cater to Kenya’s unique circumstances.
“We must ensure our PPP models distribute the burden fairly between Kenyans and the investors.” Raila said adding that Kenya must establish irreducible mini- mums including recognition of Kenyan courts, labour laws, and environmental protections.
Despite the growing criticism, he remained adamant that PPPs are Kenya’s best option for financing large-scale infrastructure projects, given the country’s current financial struggles and public resistance to higher taxes. He warned that questioning Kenya’s ability to handle PPPs could lead to a prolonged development drought.
Raila’s defence of Adani comes amid increasing resistance from other Azimio La Umoja One Kenya Coalition leaders, including Wiper Party leader Kalonzo Musyoka, who yesterday renewed their opposition to the Adani Group’s involvement in several controversial multi-billion-shilling deals.
Kalonzo, in particular, vowed to challenge the Sh236 billion, 30-year deal involving JKIA in court and expressed frustration with the government’s recent Sh95 billion energy deal with Adani, signed despite public opposition.
Last week, the government through the Ministry of Energy formalised a power deal to build and operate the four Sh95.68billion ($736 million) electricity transmission lines and two substations for 30 years before handing them over to Kenya.
These are part of the terms that the Kenya Electricity Transmission Company (Ketraco) and Adani Energy Solutions— the power subsidiary of Adani Group— signed on Wednesday, October 9, 2024 marking the country’s first public-private partnership-funded power project.
The lines to be financed through a combination of debt and equity are the 208.73-kilometre (km) 400 kilovolts (kV) Gilgil-Thika-Malaa-Konza, the 95km 220kV Rongai-Keringet-Chemosit and the 70km 132kV Menengai-Ol Kalou-Rumuruti lines.
Kenya has turned to the PPP model to fund the capital-intensive projects of building transmission lines and substations amid a cash crunch that has made it difficult for the exchequer to finance the projects.
“This agreement (Adani Energy Solutions and Ketraco) marks the beginning of a transformative initiative to develop, finance, construct, operate, and maintain key transmission lines and substations across Kenya.” Energy and Petroleum Cabinet Secretary Opiyo Wandayi said then.
However, the deals by Adani Group subsidiaries in the country including the controversial Social Health Authority (SHA) system to be provided at a cost of Sh104billion, the planned JKIA takeover alongside expansion and management of Ketraco’s power lines have since been contested as obscure.
Aviation workers through their lobby group, the Kenya Association of Air Operators (KAAO) maintain that leasing of JKIA to Adani Airports Holdings Limited (AAHL) should be done through an open competitive bidding process for transparency purposes.
KAAO expressed concerns that the bidding process for the Public-Private Partnership (PPP) related to the $1.85 billion (approximately Sh239 billion) takeover of JKIA by AAHL did not meet the required criteria and violated the provisions outlined in the PPP Act.
Currently, the court has halted all actions related to the proposed lease of JKIA to Adani until a case filed by the Kenya Human Rights Commission (KHRC) and the Law Society of Kenya (LSK) on September 9 is resolved.
On October 8, 2024, the High Court announced that it would decide whether a petition challenging the plans to lease the airport to Adani Group should be heard by a three-judge bench.
Justice John Chigiti stated that the application for a bench hearing should take precedence before any further determinations are made.
“I am of the view that the issue of formation of a bench should come first. Should a bench be set up, it shall be able and in a position to rest its mind on all the issues conclusively,” Justice Chigiti said.
The judge directed the involved parties to file and exchange their responses to the application and supporting submissions before his ruling on October 25, 2024.