Gautam Adani, billionaire and chairman of the Adani Group, during an event at Haifa Port in Haifa, Israel, Tuesday, January 31, 2023.
Kobi Wolf | Bloomberg Getty Images
Kenyan President William Ruto said on Thursday he had ordered the cancellation of a procurement process expected to give control of the country’s main airport to India’s Adani Group after its founder was indicted in the United States.
Under the proposed nearly $2 billion deal, the Adani Group will add a second runway at Jomo Kenyatta International Airport and upgrade the passenger terminal in exchange for a 30-year lease.
Ruto also said he was canceling a separate $736 million 30-year public-private partnership agreement that Adani Group companies signed with the energy ministry last month to build electricity transmission lines.
“I have directed the agencies in the ministry of transport and in the ministry of energy and petroleum to immediately cancel the ongoing procurement,” Ruto said in his address to the nation, citing the decision as “new information provided by investigative agencies and partner countries.”.
Ruto’s announcement was met with applause and cheers from MPs in parliament, where he delivered his speech. The deal drew criticism from many politicians and members of the public over concerns about a lack of transparency and value for money.
A representative from the Adani Group did not immediately respond to a request for comment.
US authorities said in an indictment on Wednesday that the group’s founder Gautam Adani, one of the world’s richest men, and seven other defendants agreed to pay about $265 million in bribes to Indian government officials.
The Adani Group denied the allegations and said in a statement that it would pursue “all possible legal means”.
Adani Group made the airport proposal in March under a procedure that surrounds competitive bidding, but it did not become public until July through leaks on social media.
Kenyan courts were temporarily blocked in September from responding to lawsuits for not handing over money to pay taxes.
Senior government officials, including Ruto, have repeatedly defended the deal despite allegations made in 2023 by US short seller Hindenburg Research – denied by the Adani Group – of improper governance practices at the company.
As late as Thursday morning, Energy Minister Opiyo Wandayi told senators that he expected the transmission line contract to go ahead as there was no bribery or corruption involved in the award.
George Kamau, a Kenyan lawyer specializing in public procurement, said the Adani Group could go to arbitration to challenge the cancellation, particularly on the transmission line deal it had signed.
“That said, the dispute resolution framework … may be biased towards the country, given the fact that the deal was canceled based on integrity issues,” he said.
