The government has vowed to proceed with the Adani Group in the Sh96.68 billion power project despite the conviction of its chairman Gautam Adani in the US over bribery.
Mr Adani, a billionaire Indian national, is the chairman of the Indian conglomerate Adani Group that owns Adani Energy Solutions Limited picked by the State to construct the Sh96.68 billion electricity transmission power lines.
In a privately initiated deal, the Kenya Electricity Transmission Company (Ketraco), a state corporation, engaged Adani to construct high-capacity range transmission power lines.
Appearing before the Senate Committee on Energy, Energy Cabinet Secretary Opiyo Wandayi said that the government will continue with the Adani deal under the Privately Initiated Proposal (PIP) in line with the Public Private Partnership (PPP) Act to enhance electricity transmission in the Country despite concerns from the public and senators.
CS Wandayi told the committee chaired by Nyeri Senator Wahome Wamatinga that the only prayer the government is seeking is for the courts to lift the orders stopping the government from signing the PIP.
“We are proceeding with Adani PIP based on the vigorous due diligence undertaken in two phases on Adani Energy Solutions. We had no knowledge of the adverse matters that should have come to light,” said CS Wandayi.
The CS told the committee that Ketraco, the contracting entity, established that Adani Energy Solutions, the proponent, passed the test in the deal to construct the high-capacity range power lines.
But even as the CS spoke, Senators Ledama Ole Kina (Narok), Edwin Sifuna (Nairobi), Bonny Khalwale (Kakamega) and Danson Mungatana (Tana River) urged him to exercise caution as they queried the composition of the due diligence team that gave the deal a clean bill of health.
“The investor you have brought on board has been indicted in the US and the indictment charges are worrying. Tell us if the award of this project was influenced by corruption,” Senator Mungatana demanded.
The authorities in the US say that Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about Sh34.3 billion ($265 million) in bribes to Indian government officials to obtain contracts expected to yield Sh259 billion ($2 billion) of profit over 20 years and develop India’s largest solar power plant.
The prosecutors in the US also noted that the Adanis and another executive at Adani Green Energy, former CEO Vneet Jaain, raised more than Sh388 billion ($3 billion) in loans and bonds by hiding their corruption from lenders and investors.
Senator Kina revealed that the deal by Adani will see the power of electricity go up as the company will charge Sh1.77 per kilowatt hour compared to the Sh0.70 per kilowatt hour that Africa at 50 that had floated for the deal but was not awarded.
“You are saying you are proceeding with the deal despite the indictment charges against the Adani Group chairman. Doesn’t that raise the company’s ethical issues?” posed Senator Kina as reminded the CS that section 41 of the PPP Act that he said is the anchor of the deal bars parties adversely mentioned in corruption.
This even as Senator Sifuna told the CS that the concerns of Kenyans against the deal cannot be dismissed based on the due diligence report that is doubtful.
“I am growing increasingly suspicious of this deal because it is not transparent. Placing the country’s critical infrastructure in the hands of one company is dangerous. I refuse to believe that Adani can do everything,” said Senator Sifuna.
Section 41 of the PPP Act states that the Directorate of Public Private Partnerships, in coordination with the due diligence on contracting authority, shall, before commencing an evaluation of a privately-initiated proposal, conduct due diligence to confirm that the private party has not been debarred by any country or any international organization from participating in public private partnerships or similar arrangement.
The directorate is also required to establish that the private party is not corrupt, has not engaged in acts of corruption, and has not been sued or convicted on account of acts of corruption.
It is also the responsibility of the directorate to establish that the private party and its directors or officers have not, been convicted of any criminal offence related to professional conduct within five years preceding the submission of the proposal, and have not otherwise been disqualified pursuant to administrative suspension or debarment proceedings.
With the Adani bribery scandal exposed in the US, Senator Khalwale demanded that the government come out clean on the deal.
“Tell us whether with the emerging issues in the US, you can still trust Adani? Do you think the due diligence that was done on Adani Energy Solutions requires an audit because Adani has a history of bribing to get projects,” said Senator Khalwale.
But despite the concerns from Senators, CS Wandayi stood his ground saying the deal is clean.
“We were able to ensure that the PIP met the threshold in line with the law. This proposal passed the test and there is no doubt,” said CS Wandayi.
