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Another Blow to Adani Group as Kenya Cancels Airport, Energy Deals
Moneylife Digital Team 22 November 2024
Economy & Nation
Soon after the US Securities and Exchange Commission (SEC) and the attorney's office for the eastern district of New York filed civil and criminal charges against Gautam Adani, his nephew Sagar Adani, and other executives of the Adani group, Kenya decided to cancel airport and energy deals signed with the Indian conglomerate. 
 
In his state of the nation address, Kenyan president William Ruto said the decision was made "based on new information provided by our investigative agencies and partner nations," without naming the US.
 
Mr Ruto says he has cancelled the multimillion-dollar Jomo Kenyatta International Airport (JKIA) expansion and energy deals after the US bribery and fraud indictments against one of Asia's richest men.
 
 
The Adani group had been in the process of signing an agreement that would modernise Kenya's main airport in Nairobi, with an additional runway and terminal constructed, in exchange for the group running the airport for 30 years.
 
Kenyan members of Parliament (MPs) backed president Ruto's decision on cancelling the Adani deal at JKIA. MPs say the move restores public confidence in the executive, according to a report from Citizen TV Kenya. 
 
  
 
According to a report from Kenya-based Citizen Digital, the Adani deals, now cancelled, were sealed with break-neck speed and shrouded in secrecy, sparking widespread criticism.
 
The report says, "In the deal that was completed in a record 17 days, Adani proposed to give JKIA a facelift through refurbishment and building of a new apron, taxiway system, and two rapid exit taxiways, slated for completion by 2029, among other phased developments, at a total cost of Ksh.260bn (billion). In return, Adani would take over the operations of the airport for a period of 30 years." 
 
"The disgruntled KAA employees went on strike, shutting down operations in the country's airports. In the end, the courts slammed the brakes on the deal, raising a red flag on the speed, secrecy, and lack of public participation in the process," Citizen Digital says.
 
In September this year, Kenya's high court temporarily blocked a proposed deal for India's Adani group to lease the country's main airport for 30 years in exchange for expanding it, a report from Reuters says, quoting court documents.
 
In a joint application, the Law Society of Kenya (LSK), the country's main bar association, and the Kenya Human Rights Commission (KHRC) told the court that the country could independently raise the US$1.85bn (billion) required to upgrade the airport in the capital Nairobi.
 
"LSK and KHRC said the alleged 30-year lease of JKIA, East Africa's largest aviation hub, was unaffordable, threatened job losses, was a fiscal risk and did not offer taxpayers value for money, court documents published by the KHRC on their website showed," the report says. 
 
But even before the dust could settle on the JKIA takeover, the Adani group had concluded another critical infrastructure deal, with the chief secretary (CS) for energy announcing the Ksh.95bn Adani-Ketraco power transmission deal. 
 
Under the second arrangement, Adani Energy Solutions – a subsidiary of the Adani group – would build and operate power infrastructure, including transmission lines in the country, for 30 years. 
 
"If not for President Ruto's cancellation, the Indian company would also have set up a substation at Thurdibuoro in Kisumu County. The cancellation of the Ketraco deal, which was signed, could be tricky for Kenya, as it may cost the country huge penalties for terminating it," the report says.
 
Comments
Nahom
3 months ago
Hush money to Kenyan Politicians should be written off in Sagar Adanis Whatsapp diary before Whatsapp reveals to US authorities
Reply
pyk
3 months ago
Ok, but who will do this work in Kenya now?? They would be deeper in mess I think .
Reply
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