Kenyan President revokes Adani Power Line and Airport deals amid fraud allegations

President William Ruto has cancelled two multi-billion deals that Kenya made with Indian conglomerate Adani Group, including the modernisation of the Jomo Kenyatta International Airport (JKIA) as well as that it had already inked with Kenya Electrical Transmission Company to build and operate four transmission lines and two substations in the country.

The other was in the works, a Sh230 billion proposal for a 30-year lease of the Jomo Kenyatta International Airport (JKIA).

“I have stated in the past, and I reiterate today, that in the face of undisputed evidence or credible information on corruption, I will not hesitate to take decisive action. Accordingly, I now direct - in furtherance of the principles enshrined in Article 10 of the Constitution on transparency and accountability, and based on new information provided by our investigative agencies and partner nations - that the procuring agencies within the Ministry of Transport and the Ministry of Energy and Petroleum immediately cancel the ongoing procurement process for the JKIA Expansion Public Private Partnership transaction, as well as the recently concluded Ketraco transmission line Public Private Partnership contract, and immediately commence the process of on boarding alternative partners,” President Ruto told Parliament in his State of the Nation address on Thursday.

This directive comes barely a few hours after Mr Wandayi told Parliament that the Ketraco deal with Adani Energies Solutions, a subsidiary of the conglomerate, will go on despite fraud charges in the United States.

Mr Wandayi told the National Assembly Energy Committee that the government had conducted two phases of due diligence exercise on Adani including a documentary review process where the company demonstrated technical, legal and financial capacity for the construction of electricity transmission lines and substations.

“At the end of the day after two phases of the due diligence the contracting Authority , the Kenya Electricity Transmission Company Limited (Ketraco) was of the view that the proponent, Adani passed the test following those two phases of dual diligence as provided in section 41 of the PPP Act,”  Wandayi said.

He further said that Adani Group showed that it had the logistical capacity to implement the project that will allow Adani to build and operate four transmission lines and two substations for 30 years before returning them to Kenya.

While appearing in Parliament to respond to questions concerning his ministry, Chirchir assured legislators that the government conducted thorough due diligence on Adani Group, which the High Court has temporarily barred from assuming control of JKIA.

He stated that Adani Group has not been involved in any acts of corruption, its directors have clean criminal records, and the company is fully tax compliant.

“Adani has not been barred by any country, has no history of corruption based on our due diligence, is solvent, and is tax compliant in all jurisdictions where it operates. Its directors have not faced criminal convictions related to professional conduct within the last five years and have not been disqualified due to any administrative suspension or debarment proceedings,” Chirchir told Parliament.

Hours before President Ruto delivered this shocker in parliament, opposition Chief, Raila Odinga, through his lawyer, Paul Mwangi, called on the government to be very keen with the Adani deals following the indictment of Adani Group’s chairperson, Gautum Adani, by the US Department of Justice.

Mr Mwangi said that former Prime Minister Odinga had last month simply underscored the need for Kenya not to vilify the Private, Public, Partnership (PPP) framework and instead work to bring transparency and accountability in the system.

While speaking on the sidelines of the ODM delegates conference in Mombasa in October, Mr Odinga said that given the current financial status of the country, PPP is the only way out of cash-intensive projects.

"If we plant doubts in our capacity to handle PPPs, we must be prepared for a prolonged period of development drought and risk being overtaken by our neighbours,” he said.

He further added that Kenya should ensure that the PPPs are handled with transparency and clear all unnecessary bureaucratic procedures and legal hurdles posing a challenge in the execution of the Act.

“I would urge all the agencies concerned to address all the concerns raised by Kenyans on these projects and ensure that we do not spook foreign capital away from the Kenyan economy,” he warned.

Shortly after delivering this statement, Kenyans criticised Mr Odinga accusing him of “laundering” the Adani Group which has on more than one occasion been at legal crossroads in the US for various accusations of malpractice including bribery and fraud.

Mr Odinga’s lawyer said that they are aware of the developments in the US where Mr Adani has been indicted adding that the US Department of Justice (DOJ) is the “world’s leading agency in the pursuit of transparency and accountability in the business sector”.

Over the years, Mr Mwangi said, the DOJ has indicted several well-known companies and businessmen and that most of these cases have been settled in consents between the Department and those indicted.

“We in Kenya should of course follow up on this development to ensure transparency and accountability here at home has not been compromised,” he said.