Blow to Adani’s as separate courts slam brakes on Ketraco, JKIA deals a day after Ruto endorsement

Barely a day after president William Ruto endorsed government of Kenya’s engagement with the controversial Indian conglomerate, the Adani Group in capital intensive and equally lucrative government contracts spanning decades through the Public Private Partnership (PPP) framework, two separate High Courts in Nairobi have temporarily slammed brakes on the airport and power line multi-billion deals.

In the first case, 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.

The development comes just two days after the Law Society of Kenya (LSK) moved to court seeking conservatory orders pending hearing and determination of the case.

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.

Earlier, besides president Ruto, 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 defense of the foreign entity.

“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.

Yesterday, while speaking in Nakuru during the ground-breaking ceremony of the 35-megawatt Orpower 22 Power Plant at the Menengai Geothermal site, president Ruto has 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.” The president noted.

The president added that: ““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.”