President Ruto Cancels JKIA and KETRACO Deals With Adani Group Over Corruption Allegations

By Orenge Wycliff

President Ruto Cancels JKIA and KETRACO Deals With Adani Group Over Corruption Allegations

President William Ruto has taken a decisive step to terminate ongoing contractual engagements between the Government of Kenya and India’s Adani Group Holdings. The directive, which was issued during his State of the Nation address on Thursday, November 21, underscores the administration’s commitment to transparency and accountability in public procurement processes.

The President revealed that the decision to cancel the agreements was based on credible allegations of corruption involving Adani Group Holdings. Ruto directed Transport Cabinet Secretary Davis Chirchir and Energy Cabinet Secretary Opiyo Wandayi to halt all negotiations under the public-private partnership (PPP) framework with the Indian conglomerate.

Decisive Leadership Against Corruption

Addressing the joint sitting of Parliament, President Ruto reiterated his administration’s zero-tolerance stance on corruption, stating that credible evidence or information would always trigger decisive action.

“I have stated in the past, and I reiterate today, that in the face of undisputed evidence or credible information on corruption, I will not hesitate to take decisive action,” declared the Head of State.

The President cited recent information provided by investigative agencies and international partners as the basis for his directive. This information revealed significant transparency violations in two high-profile projects: the Jomo Kenyatta International Airport (JKIA) Expansion PPP project and a transmission line contract under the Kenya Electricity Transmission Company (KETRACO).

National assembly parked with the law makers from both houses during president Ruto’s state of the Nation address. Photo| Curtesy

“In furtherance of the principles enshrined in Article 10 of the Constitution on transparency and accountability, and based on new information provided by our investigative agencies and partner nations, I direct the Ministry of Transport and the Ministry of Energy and Petroleum to immediately cancel the ongoing procurement process for the JKIA Expansion PPP transaction and the recently concluded KETRACO transmission line PPP contract,” Ruto announced.

International Implications and Corruption Allegations

The President’s directive followed a major development in the United States, where Adani Group’s senior executives, including CEO Gautam Adani, were indicted by the Department of Justice (DOJ) on corruption charges. The charges allege that Adani Group bribed Indian government officials to secure green energy contracts for its subsidiary, Adani Green, and misled U.S. investors.

According to court filings, the company allegedly paid over $250 million (approximately Ksh32 billion) in bribes to Indian officials to falsify information for investors and secure billions of dollars in financing. Deputy Assistant Attorney General Lisa Miller stated that the bribes were used to manipulate energy supply contracts, with the ultimate goal of defrauding investors and obstructing justice.

“This indictment alleges schemes to pay over $250 million in bribes to Indian government officials,” Miller stated in a report covered by CNN. “These offences were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of U.S. investors.”

Government Officials’ Reactions

Energy CS Opiyo Wandayi, who appeared earlier on the same day before the Senate Committee on Finance, had defended the government’s involvement with Adani Group. Wandayi insisted that due diligence had been conducted as required under the Private Public Partnership (PPP) Act.

Gautam Adani, the chairperson of Indian conglomerate Adani Group, speaks at the World Congress of Accountants in Mumbai in November 19, 2022.

“Under section 41 of the Private Public Partnership (PPP) Act, we have an elaborate mechanism for undertaking due diligence. The PPP Directorate domiciled under the Treasury, in coordination with KETRACO, conducted a due diligence exercise on Adani Energy Solution in two phases,” Wandayi said.

However, President Ruto’s directive contradicts the Energy CS’s earlier position, reflecting a firm stance against continuing engagement with a company under such serious allegations.

Public and Legal Reactions

The President’s announcement has sparked reactions across the country. In Kisii County, Senior Counsel George Morara Akuma, an advocate of the High Court of Kenya, praised the move, describing it as a bold step toward safeguarding national interests.

“The President took a bold step to cancel the Adani and KETRACO deals. These issues have been a thorn in the flesh for many Kenyans. There is no way Adani, which has been indicted by the U.S. Judiciary over corruption issues, could suddenly become holy overnight,” Akuma remarked.

Akuma’s sentiments echoed those of many Kenyans who have raised concerns about the transparency and fairness of high-value contracts involving international entities.

Impact on Kenya’s Development Agenda

The canceled deals were integral to Kenya’s infrastructure and energy sectors. The JKIA Expansion project was expected to boost the airport’s capacity to handle increasing passenger and cargo traffic, while the KETRACO transmission line was pivotal for improving electricity distribution across the country.

The decision to terminate these engagements underscores the importance of safeguarding public resources and ensuring that international partnerships adhere to the highest ethical standards. However, the move also raises questions about the potential delays in achieving key development milestones.

President Ruto reassured Parliament and the public that alternative partners would be sought to ensure the continuation of these critical projects without compromising on transparency.

“I direct the ministries involved to immediately commence the process of onboarding alternative partners to ensure that these projects proceed as planned,” he stated.

A Message to Future Partners

The cancellation of the Adani contracts sends a strong message to current and future investors in Kenya: the government will not tolerate corruption or breaches of transparency. Analysts argue that this bold step could bolster Kenya’s reputation as a country committed to upholding the rule of law and protecting public resources.

While the decision may have immediate economic and diplomatic ramifications, it sets a precedent for ethical governance and accountability in public-private partnerships.

Conclusion

President William Ruto’s cancellation of the JKIA and KETRACO deals with Adani Group marks a significant moment in Kenya’s fight against corruption. The directive reflects the government’s commitment to transparency, accountability, and the rule of law. As Kenya moves forward, the focus will now shift to identifying trustworthy partners to carry out these vital projects while maintaining the integrity of public procurement processes.

With investigations into the Adani Group ongoing, this decision underscores the importance of vigilance and due diligence in protecting the nation’s interests from unscrupulous entities.