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Many critics have pointed to the scandals surrounding the Adani Group’s dealings in other countries, particularly in India. | Image: Bloomberg
Billionaire Gautam Adani’s proposal to run Kenya’s main airport has sparked protests, Senate hearings and lawsuits against the group controlled by Asia’s second-richest man, even as it bags a deal to construct high-voltage power transmission lines in the East African nation.
A court has already frozen Adani’s unsolicited bid to expand Jomo Kenyatta International Airport, while strikes at the facility and criticism from opposition lawmakers has forced the government to defend the opaque circumstances surrounding the deal. It comes amid allegations that Adani’s $203 billion empire is under a Swiss probe for money laundering, which the group denies.
“From the very beginning, there has been a general pattern by the government to hide from the public what is contained in the Adani deal,” Governor Anyang’ Nyong’o, leader of the opposition Orange Democratic Movement, wrote in Kenya’s The Star newspaper this week. “Past similar projects that circumvented transparent dealings and formal institutional mechanisms litter our history as major scandals.”
Adani is perceived as a close ally of Indian Prime Minister Narendra Modi, whose activities are seen as part of India’s efforts to counter the reach of its rival China in resource-rich Africa. The Kenyan government last week submitted a written explanation to lawmakers of why the proposal was above board.
Adani Group said its proposals followed procedures.
“While no contract has been awarded, both our proposals — related to the airport and transmission projects — were submitted in accordance with the government of Kenya’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 relevant laws, policies and regulations in every jurisdiction where we operate.”
Lawsuits and Hearings
As news of the Adani deal spread in early September — fed by documents released by a whistleblower on X — striking airport workers fearing for their jobs ground the facility to a halt, stranding passengers. Days earlier, a Kenyan high court temporarily froze the project, which would grant Adani Airports Holding Ltd. a concession to run it for 30 years, after the constitutionality of the lease was challenged.
The case, brought by the Kenya Human Rights Commission and Law Society of Kenya, argued the proposed development would require investment of $1.85 billion, which Kenya could raise itself without having to bow to Adani’s terms.
What’s most angered Kenyans — simmering over frequent scandals about state corruption that have sparked street protests and deadly responses from the security forces — is the veil of mystery shrouding the deal.
Despite a Senate summons to present a copy of Adani’s plan for the airport, Transport Secretary Davis Chirchir turned up at a meeting with lawmakers without the document on Sept. 12, local media reported. He said the government was carrying out its due diligence after receiving the proposal at the start of March.
The minister denied knowledge of other parties keen on Kenyan airports. But Corporacion America Airports SA, one of the world’s largest airport operators, said it expressed interest mid-June but hasn’t heard back from authorities.
Even as Senators decried the airport deal, a presidential adviser announced that the Kenya Electricity Transmission Co. recently awarded Adani Group and a unit of the African Development Bank a $1.3 billion public-private partnership concession to construct high-voltage power lines.
Terms of the airport proposal include Adani taking an 18 per cent equity stake in JKIA and winning an undertaking that no competing airport will be built for 30 years, according to the court documents arguing against the deal, which included details of the leaked Adani offer.
Adani would also be allocated land to build hotels and businesses to compliment the airport, as well as being granted favorable tax treatment from the Kenyan government, according to the documents.
Adani, in its reply to the court case, said the application contained numerous claims and allegations that were were untrue or unsubstantiated, without providing specific details.
The Adani spokesperson told Bloomberg that said the company can’t comment on terms of the public-private partnership or concession agreements because discussions are ongoing.
Kenyans opposing the deal argue the investment amount of $1.85 billion cited in the court application is too meager, and the concessions too deep, at a time when neighboring nations are plowing billions of dollars into new projects as they jostle to dominate the lucrative market for regional 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 at the lack of transparency on the agreement’s terms. “They just signed and surrendered Kenya’s sovereignty.”
Ethiopia, which already boosts Africa’s biggest airline, is designing what will become the continent’s largest airport — for $5 billion. Aided by Qatar, Rwanda is also constructing a new airport for an estimated $2 billion.
Many critics have pointed to the scandals surrounding the Adani Group’s dealings in other countries, particularly in India.
At home, Adani is under a court-mandated probe after Hindenburg Research raised questions over its accounting and audits. The short seller now also says the empire is in Swiss investigators’ cross-hairs over money laundering, claims the group has said are “baseless.”
In the US, Adani is also facing scrutiny into whether the company may have engaged in bribery, people with direct knowledge of the matter told Bloomberg earlier this year.
Adani Group said at the time that it was not aware of any investigation against its chairman, and that it was subject to and fully compliant with anti-corruption and anti-bribery laws in India and other countries.
First Published: Oct 02 2024 | 10:39 PM IST