Questions Senate wants answered on Adani deal
Roads and Transport Cabinet Secretary Davis Chirchir when he appeared before the Senate Committee on Roads, Transportation and Housing at County Hall, Nairobi on September 13, 2024, to respond to questions on the leasing of the Jomo Kenyatta International Airport to Adani.
Senators have raised eight questions on the government's proposal to lease Jomo Kenyatta International Airport (JKIA) to Indian conglomerate Adani.
In a tense five-hour meeting with Transport CS Davis Chirchir on Thursday, the Senate Committee on Roads, Transport and Housing demanded answers on some critical areas they want clarified before the final deal is signed.
Among the questions the senators want answers to are how the government settled on Adani, why the government shouldn't cancel the deal at this stage, why the tender wasn't open to competitive bidding, Adani's shareholders, and a feasibility report on Adani's background.
The committee also wants the government to come clean on whether the deal has already been struck and it's just pulling the wool over the public's eyes, as a team has already been sent to India and negotiations are underway on the composition of the management team.
The committee also questioned how Adani had access to exclusive photographs of the JKIA, including satellite areas.
Documents submitted to the committee also show that concerns raised by the Kenya Airport Authority (KAA) about the deal at its board meeting in June were ignored.
Minutes of the board meeting submitted to the committee show that at the June meeting, the board pointed out that the deal had attracted a lot of interest from certain people in the government, making it difficult to implement.
"It was noted that the project has attracted interest from the government and it's difficult to continue in its execution," reads the board's minutes, No. 06/2024, submitted to the committee.
Even before writing its final report, the committee called for the cancellation of the deal, describing it as a bad deal for the country.
Busia Senator Okiya Omtatah said the whole process was fraudulent and not based on the law as stipulated in the Public Procurement Act.
"All this concealment you are presenting before us is a fraud. This could just be a money laundering process where money stolen from Kenyans is brought back into the country in the name of building an airport," he said.
Mr Omtatah said that before such a deal is made, the law requires the company, in this case Adani, to be tax compliant in the countries where it operates and that the company should have no record of fraud.
"Where is the evidence that competitive bidding hasn't worked in these areas and that only Adani is the best to expand the airport?" he asked.
Narok Senator Ledama Ole Kina said Kenyans were being subjected to fraud and the deal should be cancelled.
"How did Adani get specific details about our airport, including photographs? Adani is a cabal led by some people in this country," Ole Kina said.
Committee deputy chairperson Peris Tobiko said the verdict of Kenyans was that the deal was bad and should be scrapped.
"Kenyans cannot put their investments in a scam," she said.
Nandi Senator Samson Cherargei claimed the deal was done outside JKIA by government officials and should be cancelled to calm public anger.
"This deal is rooted in fraud. It's illegal, it's fraudulent, and it should be scrapped," he said.
"Either KAA or the National Treasury has been ignored in this deal. Do what the people of Kenya want; cancel this deal and we will end the charade," he added.
Mr Chirchir, while responding to the barrage of questions, defended the deal, saying no agreement has been signed so far, hence all the apprehensions being raised will be assessed.
The CS told the committee, chaired by Kiambu Senator Karungo Thang'wa, that they are currently at a stage where they are doing due diligence on the Adani deal and will make a decision in the best interest of Kenyans.
Mr Thang'wa said the problem may not be with the deal, but with the wheeler-dealers who are determined to cash in at the expense of Kenyans.
"My advice would be to take Kenyans with you. If they tell you to stop, please stop because if you continue, you will meet them at the finish line," Mr Thang'wa said.
Mr Chirchir responded, "This engagement is crucial as it will help determine whether the proposal is in line with our national interest."
He said the matter would be subjected to public participation and submitted to the Attorney-General before being presented to Cabinet.
"At this stage, it is important to emphasise that no legally binding agreement has been reached. The discussions have only resulted in the development of a non-binding Heads of Terms document, which has also not been signed," said Mr Chirchir.
The Heads of Terms outlines key terms of the commercial transaction that have been mutually agreed in principle during the negotiation process.
Mr Chirchir told the committee that while the Heads of Terms reflects a serious intention and have moral authority, they do not legally bind either party to conclude the deal as proposed.
The CS told the committee that the government had decided to work with Adani through a public-private partnership because the financial strength required to carry out the project could not be provided by the government due to fiscal reforms.
"What's not in doubt is that we need a new airport and it's incumbent on us to accommodate investors. Our fiscal leeway doesn't allow us to build a new airport," he said.
Mr Chirchir added that if the government were to use its resources, it would take 60 years to build the new facility. He said that despite the negative reports about Adani, the company had also built some of the best airports in the world, such as Mumbai in India.
On possible job losses, Mr Chirchir said the draft proposal has three options for current employees. The options include moving with Adani management, staying with KAA to manage other airports and a golden handshake for those who want to call it a day.
The CS also told the committee that they are negotiating with Adani to have the CEO, HR manager and 90 percent of the employees to be Kenyan, with all employees becoming Kenyan within two years of the deal.
In the proposed deal, which has sparked public outrage, Adani wants to take over JKIA for 30 years in a plan that includes changing aviation laws and policies to limit competition and maximise profits.
The deal led to protests by airport workers on Tuesday, causing chaos and massive flight delays at Africa's busiest transport hub.
The High Court on Tuesday temporarily suspended the proposed plans to lease the airport until October 8, when the case will be heard. The case was brought by the Kenya Human Rights Commission and the Law Society of Kenya.
The eight questions Senate wants answered:
- Why competitive bidding was not appropriate for the deal
- How and why the government chose Adani as the best company for the job
- Adani shareholders
- Feasibility study report on Adani's background
- How Adani obtained exclusive photographs of JKIA, including satellite areas
- Whether the deal is already done as the government has sent a team to India and negotiations are ongoing on the composition of the management team.
- Why the opinion of the KAA board, which expressed reservations about the deal, was ignored
- Whether the Attorney-General and the Ministry of Finance were involved in the negotiations.
