Buoyed as remarkable private sector financing deal that would ease tax burden on Kenyan taxpayers’ and reduce Kenya’s dependence on loans, government functionaries were deployed in an all-out defense of the controversial airport expansion and power line transmission deals shrouded in secrecy and birthed through the Public Private Partnership arrangement (PPP) arrangement, all in favour of Indian billionaire, Gautum Adani’s owned Adani Group.
The spirited push by government to see through the projects came against the backdrop of intense opposition by the public, professional bodies and court petitions seeking to bar the Jomo Kenyatta International Airport (JKIA) proposed takeover and Kenya Electricity Transmission Company Limited (Ketraco) Sh95.7billion power line expansion deals, each spanning for a period of 30 years.
However, during his third State of the Nation address in Parliament yesterday, president William Ruto stopped the Adani reggae.
Adani subsidiaries, the Adani Airport Holdings Limited (AAHL) was to take over JKIA while Adani Energy Solutions Limited (AESL) and Ketraco already signed legitimate contractual obligations to undertake power line expansion at a cost of Sh95.7billion on October 9, 2024.
Events preceding president Ruto’s pronouncements yesterday in Parliament bears all the hallmarks of glaring gaps, acts of commissions and omissions by public institutions and government operatives in flagging Adani’s dark history riddled with claims of stock manipulation, environmental abuse and conspiracy, with the latest being defrauding investors and securities fraud.
While defending Adani’s past record on the floor of the National Assembly, Roads and Transport Cabinet Secretary said the government did not find any adverse report on the part of the Indian conglomerate in countries it has operated and has tax obligation in and had not been debarred.
However, Gatanga Member of Parliament (MP) Edward Muriu provided evidence of Adani having been blacklisted in Australia and India.
Last month, two separate High Courts in Nairobi temporarily slammed brakes on the airport and power line multi-billion deals.
In the first case filed by the Law Society of Kenya (LSK), in his ruling, High Court Justice Bahati Mwamuye decreed that Law Society of Kenya’s (LSK’s) petition challenging the award of Sh95.7billion 30-year deal between Adani Energy Solutions Limited (AESL) and the Kenya Electricity Transmission Company (Ketraco) had met the legal threshold for the court to grant conservatory orders halting it despite the instruments the contract having been signed on October 11, 2024.
“Pending the inter partes hearing and determination of the Application dated 23/10(2024, a conservatory order be and is hereby issued suspending the implementation of any Project Agreement between the 1st, 3rd, 4th, 5th. 6th, and 7th Respondents jointly and severally and the 2nd Respondent and/or any of its related companies and entitles with regard to development of transmission lines, substations, or any other electrical power infrastructure,” Justice Mwamuye ruled.
“Pending the inter partes hearing and determination of the application, a conservatory order be and is hereby issued restraining the respondents from entering into any new agreement furthering any existing agreement concerning the second respondent and or any of its related companies and entities with regards to development of transmission lines, substations or any other electrical power infrastructure.”
Additionally, the judge directed the lawyers’ body to forward the application, petition, and court order to the respondents by close of business on Friday and to file an affidavit of service in that regard.
“The respondents shall file and serve their responses to both the application and petition by close of business on 8/11/2024. The parties shall supply the court with physical copies of all pleadings and documents filed by them in this matter,” The judge noted.
In the second case, momentarily poured cold water on the contentious planned takeover of the Jomo Kenyatta International Airport (JKIA) by the Adani Airport Holdings Limited (AAHL) after High Court Judge Justice John Chigiti today referred the petition challenging the proposed takeover to Chief Justice Martha Koome for the empanelment of a bench.
In the case, the Kenya Human Rights Commission (KHRC) and the Law Society of Kenya (LSK) had moved to court to challenge the takeover saying that the deal violated the principles of good governance.
The two organisatoins further contended that the process lacked accountability and transparency.
“That this matter is referred to the CJ for empanelment of a bench.” ustice Chigiti ruled.
LSK and KHRC argued that JKIA is a strategic and profitable national asset and the deal is, therefore, irrational and violates the principles of good governance, accountability, transparency, and prudent and responsible use of public money.
In the deal, the Indian firm would upgrade the airport, including the construction of a second runway and a new passenger terminal under a 30-year build-operate-transfer (BOT) contract.
KHRC and LSK, however, argued that Kenya can independently raise the estimated Sh238billion needed to expand JKIA without leasing the airport for the stated period.
“Thus, the Adani proposal is unaffordable, threatens job losses, exposes the public, is disproportionate to fiscal risk, and offers no value for money to the taxpayer.” Lawyer Dudley Ochiel said in the application.
Earlier, aviation workers through their lobby group, the Kenya Association of Air Operators (KAAO) had voiced their concerns maintaining 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.
The Adani Group subsidiaries in the country have been pushing for three key PPP projects notably 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 all of which have since been contested as obscure.
This comes amid growing public outrage over the shadowy deals shrouded in deep secrecy.
Yesterday, after Adani Group Chairman and Founder Gautum Adani and seven other directors were charged by US prosecutors New York court and warrants of arrest issued against them over alleged multibillion-dollar fraud scheme, president Ruto ordered cancellation of Adani contracts in the country.
“I now direct in furtherance of the principles enshrined in article 10 of the Constitution on transparent accountability and based on new information provided by investigative agencies and partner nations that the procuring agencies within the Ministry of Transport and the Ministry of Energy Petroleum to immediately cancel the ongoing procurement process for the JKIA expansion.” President Ruto said.
On Wednesday, US authorities charged Adani and two other executives at Adani Green Energy, his nephew Sagar Adani and Vneet Jaain, with agreeing between 2020 and 2024 to pay more than $250million (Sh32billion) in bribes to Indian government officials to obtain solar energy supply contracts expected to yield $2billion (Sh258billion) in profits.
Prosecutors said the renewable energy company also raised more than $3bn in loans and bonds during this period based on false and misleading statements.
Five other people were hit with related criminal conspiracy charges, including two executives of another renewable energy company, and three employees of a Canadian institutional investor.
However, the Adani Group has since denied the charges.
Previously, opposition leader Raila Odinga whose ODM party has since been co-opted in the president William Ruto’s administration through the Broad-Based-Government framework came to the defence of the foreign entity.
Similarly, on October 24, 2024, speaking in Nakuru during the ground-breaking ceremony of the 35-megawatt Orpower 22 Power Plant at the Menengai Geothermal site, president Ruto told Kenyans Adani is good for the country.
President Ruto defended the 30 years Sh95.7billion power transmission projects awarded to Adani Energy Solutions Limited (AESL), a subsidiary of Adani Group, under the PPP framework, urging Kenyans to embrace such initiatives.
“The Adani Group are investing Sh95billion of their money in the transmission line. We would have otherwise gone to borrow that money and burden the people of Kenya. This is now a private-sector investment, similar to the Nairobi Expressway’s… It is crucial for us as a nation to understand that public-private partnerships provide a win-win situation where we deliver public services using private investment, supporting overall development.” President Ruto said.
Others who have come to the defense of the now defunct Adani deals include Energy Cabinet Secretary Opiyo Wandayi, National Treasury CS John Mbadi, National Assembly Majority Leader Kimani Ichung’wah and Kapseret MP Oscar Sudi Among others.
Today, when contacted by The Informer Media Group for comment over possible gaps or acts of commission or omission on the part of government in flagging Adani’s past adverse history and the loses Kenyan taxpayers stand to lose, by the time of going to broadcast, neither the CS for Roads and Transport Davis Chirchir nor Principal Secretary, State Department Transport Mohamed Daghar responded to our queries.
On his part, Energy Principal Secretary Alex Alex Wachira acknowledged receipt of our queries and promised to get back.
“Thank you for reaching out. Allow me some time to work on the questions asked since I need to do a comprehensive work and am heading to a committee of Parliament on Energy.” Wachira told The Informer Media Group.
