Impact on Investors: Kenya Cancels $2.5bn Adani Deals Following US Indictment – What It Means for Business Opportunities
NAIROBI: Kenyan President William Ruto announced on Thursday the cancellation of a procurement process intended to grant control of the country’s main airport to India’s Adani Group, following the indictment of its founder in the United States.
The proposed agreement, valued at nearly $2 billion, was designed for the Adani Group to construct a second runway and upgrade the passenger terminal at Jomo Kenyatta International Airport in exchange for a 30-year lease. Additionally, Ruto revealed that a separate $736-million public-private partnership deal, signed by an Adani Group company with the energy ministry last month for constructing power transmission lines, would also be annulled.
"I have directed agencies within the ministries of transport and energy and petroleum to immediately cancel the ongoing procurement," Ruto stated during his state of the nation address, citing "new information provided by investigative agencies and partner nations" as the reason for his decision.
His announcement received enthusiastic applause and cheers from lawmakers present in parliament. The proposed agreements had faced significant criticism from various politicians and members of the public who raised concerns over transparency and value for money.
Representatives from the Adani Group did not provide an immediate response to requests for comment.
U.S. authorities revealed in the indictment on Wednesday that Gautam Adani, the group’s founder and one of the world’s wealthiest individuals, along with seven other defendants, allegedly agreed to pay approximately $265 million in bribes to Indian government officials. The Adani Group has denied these allegations and stated that it would pursue "all possible legal recourse."
The airport proposal was initially submitted in March through a non-competitive bidding process, gaining public attention in July following a leak on social media. A Kenyan court temporarily halted the project in September due to concerns raised in a lawsuit regarding the lack of value for taxpayers.
Despite ongoing allegations of governance issues at the Adani Group—claims made last year by the U.S. short-seller Hindenburg Research, which the company denied—senior government officials, including Ruto, had consistently defended the deals. Just hours before the president’s announcement, Energy Minister Opiyo Wandayi assured senators that the transmission lines contract was expected to proceed, asserting that it had been awarded without any bribery or corruption involved.
Special Analysis by Omanet | Navigate Oman’s Market
The cancellation of major contracts in Kenya involving the Adani Group underscores rising regulatory scrutiny and the potential for increased transparency in public procurement. For businesses in Oman, this suggests that aligning with transparent practices and robust governance is crucial to avoid similar pitfalls, providing both opportunities for ethical companies and heightened risks for those entangled in opaque dealings. Investors and entrepreneurs should prioritize partnerships and projects that emphasize accountability to bolster public trust and attract investment in the evolving market landscape.
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