The Kenyan government has formally terminated the Sh637 billion deals with the Adani Group, marking a major policy shift following President William Ruto’s directive to cancel the contracts. The decision affects two major agreements, one concerning the takeover of Jomo Kenyatta International Airport (JKIA) and another related to the construction and management of electricity transmission lines.
National Treasury Cabinet Secretary (CS) John Mbadi confirmed the cancellation on Thursday during his appearance before Parliament’s Public Debt and Privatisation Committee, chaired by Balambala MP Shurie Omar. Mbadi explained that the decision to disengage from the deals, which had drawn controversy and legal challenges, was made following President Ruto’s explicit instruction, which he reiterated in Parliament. The CS assured lawmakers that there would be no financial burden on taxpayers as a result of the deal’s termination.
The Adani Deal at JKIA: The Cancellation and Its Implications
One of the primary deals that has been canceled involved the Adani Group’s acquisition of JKIA. The Indian conglomerate had signed an agreement with the government to take over the management and expansion of the airport for 30 years at a cost of Sh238 billion. The deal also included plans for upgrading the country’s largest and busiest airport, a key strategic asset for Kenya’s economy and tourism sector.
However, the proposed deal was met with significant resistance from various quarters, including lawmakers and members of the public. The critics argued that the deal had been made in secrecy, without public consultation or adequate transparency. In the wake of growing concerns, President Ruto intervened, instructing the relevant authorities to halt the agreement, and the government has now officially pulled out of the deal.
According to CS Mbadi, no formal agreements had been signed regarding the JKIA takeover, as the discussions were still in the negotiation phase. This means that no financial penalties will arise from the cancellation of the JKIA deal, ensuring that taxpayers will not bear the cost of the withdrawal.
Ketraco Transmission Lines Deal: Disengagement and Review Process
Another significant aspect of the Adani contracts involved the Sh95 billion deal with Ketraco, Kenya’s electricity transmission company. Under this agreement, Adani Energy Solutions, a subsidiary of the Adani Group registered in Kenya, was set to construct and manage electricity transmission lines for 30 years.
Following President Ruto’s directive, a team of technocrats from the Treasury, the Ministry of Energy, JKIA, and Ketraco was quickly assembled to review the contracts. Mbadi confirmed that the team convened the day after the President’s announcement to assess the contracts and their potential financial impact. This group worked swiftly to implement the directive and ensure that no unforeseen costs would burden the Kenyan taxpayers as a result of canceling the Ketraco deal.
In his statement, Mbadi emphasized that the cancellation of the Ketraco deal would not result in any penalties. He also reassured lawmakers that there were no signed agreements yet, and thus, no costs were expected from breaching the contract.
Legal Challenges and Public Reaction
The cancellation of the Adani deals has not been without controversy. The High Court recently ordered the government to produce evidence substantiating the claims of the deal’s cancellation, following a petition filed by opponents who argued that the agreements were signed without public involvement or proper oversight. The court case has further highlighted concerns over the transparency of the deal-making process.
Despite these challenges, the government has stood firm in its decision, with Mbadi reiterating that the directive from the highest level of government has been implemented thoroughly. The CS emphasized that the cancellation was in line with the government’s broader push for better governance and fiscal responsibility, ensuring that Kenya’s national assets and resources are managed in the best interest of the public.
Moving Forward: A New Direction for Kenya’s Public-Private Partnerships
The termination of the Adani contracts signals a shift in how Kenya will approach major public-private partnerships moving forward. While the Adani deal was meant to bring much-needed investment into key infrastructure sectors, the public outcry and legal challenges have demonstrated the importance of transparency and public involvement in such high-value agreements.
As Kenya continues to navigate complex issues of infrastructure development and privatization, the government’s decision to terminate the Adani deals sets a precedent for future projects. It underscores the need for careful scrutiny and the inclusion of local stakeholders in decision-making processes that have long-term implications for the country’s economy and the welfare of its citizens.
The next steps for the Kenyan government will involve re-evaluating its approach to major infrastructure projects, ensuring that future partnerships align with the country’s economic goals while maintaining transparency and accountability.
