Adani airport project sparks protests, lawsuits and hearings in Kenya | Company news

“From the very beginning, the government has tended to conceal the content of the Adani agreement from the public,” Governor Anyang’ Nyong’o, leader of the opposition Orange Democratic Movement, wrote in Kenya’s The Star newspaper this week. “Previous similar projects that bypassed transparent transactions and formal institutional mechanisms litter our history as major scandals.”

Adani is seen as a close ally of Indian Prime Minister Narendra Modi, whose actions are seen as part of India’s efforts to counter rival China’s reach in resource-rich Africa. Last week, the Kenyan government provided lawmakers with a written explanation of why the proposal was passed.

The Adani group said its proposals were procedurally compliant.

“While no contract was awarded, both of our proposals – for the airport and transmission projects – were submitted under the Government’s Public Private Partnership Act of 2021, in the normal course of business,” a spokesperson told Bloomberg News. “As a law-abiding company, Adani is committed to full compliance with all applicable laws, rules and regulations in every jurisdiction in which we operate.”

Trials and hearings

When news of the agreement with Adani spread in early September – fueled by documents published by a whistleblower on website X – striking airport workers, fearing for their jobs, shut down the facility, detaining passengers. A few days earlier, the Kenyan Supreme Court temporarily froze the project, which, after questioning the constitutionality of the lease agreement, granted Adani Airports Holding Ltd. a license to operate it for 30 years.

The case, brought by the Kenya Human Rights Commission and the Law Society of Kenya, argued that the proposed development would require an investment of $1.85 billion, which Kenya could raise on its own without having to bow to Adani’s terms.

What has most angered Kenyans – angered by frequent corruption scandals in the country that have sparked street protests and deadly responses from security forces – is the veil of secrecy that shrouds the deal.

Local media reported that despite a Senate call for a copy of Adani’s airport plan, Transportation Secretary Davis Chirchir showed up at a Sept. 12 meeting with lawmakers without the document. He said the government conducted due diligence after receiving the request in early March.

The minister denied knowledge of other parties interested in Kenyan airports. However, Corporacion America Airports SA, one of the world’s largest airport operators, said it had expressed interest in mid-June but had not received a response from authorities.

Even as senators condemned the airport deal, a presidential aide announced that Kenya Electricity Transmission Co. recently awarded the Adani Group and an affiliate of the African Development Bank a $1.3 billion public-private partnership concession to build high-voltage power lines.

Terms of the airport proposal include Adani taking an 18% stake in JKIA and winning a commitment that no competing airport will be built for 30 years, according to court documents challenging the deal, which included details of Adani’s leaked offer.

The documents show that Adani will also receive land to build hotels and businesses on the airport property and will also receive favorable tax treatment from the Kenyan government.

Adani, in response to the court case, said the application contained numerous claims and allegations that were false or unsubstantiated, without providing specific details.

An Adani spokesman told Bloomberg that the company could not comment on the terms of the public-private partnership or concession agreements because talks were ongoing.

Kenyans opposing the deal argue that the $1.85 billion investment figure in the court request is too modest and the concessions too deep at a time when neighboring countries are investing billions of dollars in new projects as they jostle to dominate the lucrative market regional products transport.

“It’s a terrible deal,” said Macharia Munene, a professor of history and international relations at the United States International University in Nairobi, pointing to the lack of transparency in the terms of the deal. “They have just signed and renounced Kenya’s sovereignty.”

Ethiopia, which already supports Africa’s largest airline, is designing the largest airport on the continent – at a cost of $5 billion. With Qatar’s help, Rwanda is also building a new airport at an estimated cost of $2 billion.

Many critics pointed to scandals surrounding the Adani Group’s activities in other countries, especially in India.

Domestically, Adani is under a court-ordered investigation after Hindenburg Research raised questions about its accounting and auditing. The short-seller now also claims that the empire is in the crosshairs of Swiss investigators for money laundering, claims the group has described as “baseless.”

In the U.S., Adani also faces scrutiny over whether the company may have engaged in bribery, people with direct knowledge of the matter told Bloomberg earlier this year.

The Adani Group said at the time that it was not aware of any investigation against its CEO and that it was subject to and fully compliant with anti-corruption and anti-bribery laws in India and other countries.

First publication: October 2, 2024 | 22:39 IST