Kenya cancels deal with company of US-indicted tycoon

The country’s president has said the decision on India’s Adani Group is based on information from investigative agencies and “partner nations”

Kenyan President William Ruto says he has ordered the immediate termination of airport expansion and energy contracts with India’s Adani Group. The move came just a day after the conglomerate’s chairman was indicted in the US for alleged fraud.

Prosecutors at the federal court in Brooklyn on Wednesday accused billionaire Gautam Adani of paying $250 million in bribes to Indian government officials to secure “lucrative” solar power contracts with electricity distribution companies. The Adani Group has denied the allegations.

In a national address on Thursday, Ruto said the decision to cancel the two major deals was made on “new information” provided by Kenyan investigative agencies and “partner nations.”

“In the face of undisputed evidence or credible information on corruption, I will not hesitate to take decisive action,” Ruto said in his speech from parliament in the capital, Nairobi.

READ MORE: Indian tycoon indicted in US for alleged fraud at home

The proposed agreement with Adani, which the Kenyan government described as a “public-private partnership,” would have allowed the Indian company to operate the Jomo Kenyatta International Airport (JKIA) for 30 years, reportedly in exchange for $1.8 billion in investment in the country. The deal would also have covered an expansion of the airport, including the construction of a new runway and passenger terminal at the hub, which Nairobi has said is operating above its capacity and requires modernization.

Kenya’s aviation workers have protested and gone on strike over the controversial pact, citing concerns such as the possibility of a mass layoff of locals under the Adani Group’s management. The Kenyan Aviation Workers Union (KAWU) had demanded the “immediate resignation” of the entire board of directors of the country’s airports authority, accusing them of putting on “a show of incompetence in presiding over” the Adani transaction.

READ MORE: Strike causes chaos at major African airport (VIDEO)

In September, the Kenya Human Rights Commission and an association of the country’s lawyers jointly filed a lawsuit challenging the project, claiming that “leasing the strategic and profitable JKIA to a private entity is irrational.” They argued that it violates the constitutional principles of “good governance, accountability, transparency, and prudent and responsible use of public money.” 

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“I have directed the agencies within the ministry of transport and the ministry of energy and petroleum to immediately cancel the ongoing procurement process for the JKIA expansion transaction, as well as the recently concluded KETRACO transmission line... contract,” Ruto announced on Thursday amid cheers from lawmakers.

The Kenya Electricity Transmission Company Limited (KETRACO) and Adani Energy Solutions Limited signed an agreement worth $736 million last month. It would have reportedly allowed Adani to construct and run four power transmission lines and two substations for 30 years before returning them to the African country’s government.

On Thursday, Kenyan Energy Minister Opiyo Wandayi told a parliamentary committee there was no bribery or corruption involved in the signing of the energy deal with the Indian company.