Adani JKIA takeover deal raises questions on economic governance

 

Police officers tries to contol some of the stranded passengers at JKIA after aviation workers staged a strike over contraversial take over by a foreign investor on September 11, 2024. [Collins Oduor, Standard]

When Kenyans promulgated the Constitution of August 27, 2010, they unequivocally pronounced themselves on how they desired to be governed. The people established for themselves the democratic order, institutions and instruments of government that they felt would best serve their interests and those of their children.

Despite that, Kenyans have time and again been treated to circuses that sound like works of fiction until the details start emerging.

The supposed Adani deal over Jomo Kenyatta International Airport is the latest such drama. Yet, as more unfolds on the airport drama, it is emerging Adani may also have spread its roving eyes into other strategic agencies in the energy sector. It is unimaginable how people of sound mind, professionals and respectable members of our community can entertain, let alone sign, to the absurd details emerging from the so-called ‘privately initiated proposal over the airport.

Forget about the denials peddled from high offices in the land. This is a familiar road we have travelled time and again in the past, only to wake up to the reality that strategic national assets were put at risk by senior public officials for a morsel.

For instance, the exact contractual obligation yoked to the Kenyan citizenry on the standard gauge railway (SGR) and the Expressway remains unknown to the taxpayers. There is public audit evidence and Parliamentary records that the Kenya Ports Authority assets were put at risk by this contract. Yet, the port was not the owner or implementor of the project. Like the airport, the port of Mombasa is the main entry point into the country by sea and is among the few State agencies that make a profit.

It requires little imagination for anyone to see that there are highly placed agents of evil salivating over any state agency that seems to be profitable. The actors seem to be borrowing from the privatisation initiative of the 1970s when senior public officials sold strategic State agencies to themselves or under proxies.

For a layman, many questions trouble the mind: which laws do these people rely on to subject the Kenyan taxpayer to contractual obligations that are a stranger to the Constitution? What do those who negotiate and agree to such offensive clauses take the Kenyan people for? More fundamentally, can contracts that contravene the doctrines and limits of authority established by the Constitution be binding on the Kenyan people? Can these people be brought to account for acting ultra vires to the supreme will of the people?

The Law

Chapter 12 of the Constitution establishes the order in which public resources shall be governed and managed. Implicitly, therefore, any contract that places any form of financial burden on taxpayers directly or indirectly would be within the purview of this chapter. Article 201 exclusively demands for openness and accountability, including public participation in all public financial matters.

If we read this principle of public financial management established by the Constitution, can there be any doubt what the will of ‘Wanjiku’ is? For example, are revenues collected and expenditures incurred from the airport within the scope of public resources? If so, under what circumstances can the officials of the Kenya Airports Authority (KAA) privatise the proceeds of the airport in such a clandestine manner?

For argument's sake, let us assume for a moment that the information on the details of the proposal circulating in the media is factual. That would mean KAA would assume full responsibility for accountability to the oversight organs including the citizens, Parliament, independent constitutional offices and investigative agencies for matters at the airport.

This is even though KAA would have relinquished all control over the revenues, expenditures, human capital and operations at the airport.

In return, KAA shall be paid concession rentals roughly equivalent to the profits the airport is currently making while Adani pockets a profit of at least 18 per cent on debt and 21 per cent on equity.

In addition, Adani would be protected against all political, social and business risks associated with operating the airport. Further, our children will not be allowed to invest in new airports or upgrade existing ones to compete with this ‘god-sent’ private investor for three decades, even if they made all the money in the world.

In case of any disputes, the Kenyan law is technically declared a nullity and jurisdiction over the contract transferred outside Kenyan soil. This is precisely the same script played over the SGR contracts. It is the government's evidence in court that it was barred from ever disclosing the contents of the contracts to anybody and disputes placed under the jurisdiction of the contractors and lenders.

Former President Uhuru Kenyatta denied these facts to the nation, the same as the ongoing official denials as to the exact contents of the Adani offer.

So, what sort of deal is this? Who can sign such a contractual obligation in their right frame of mind if the intent is to preserve and advance the strategic economic interest of the Kenyan people? Why tie the hands of future generations from applying their collective intellect to reset the economy and prosper if they elect visionary leaders and men of integrity for themselves? Why enslave them to the individual greed of those we have elected into office today?

Actional points

While the political elites appear to be still wondering in the miasma of the Kenya of yesteryear, the electorates are way ahead of the game. I can bet no matter what shades this Adani deal may come in, it is dead on arrival. It’s going the Finance Bill 2024 way.

Kenya Kwanza wheeler dealers must cut their losses and return the kickbacks to Adani. The losses suffered by airlines, businesses, travellers and the national shame brought unto the Kenyan people is unacceptable. The damage done to Adani's adventures is incurable.

Secondly, it is time the people breathed life into Article 226(5) of the Constitution. All persons who sign such contracts and their political patrons must not be allowed to enjoy their loot while taxpayers suffer from their economic sabotage. One of the BBI cases was specifically based on this article.

It is time the courts pronounced themselves on the letter and spirit of this Constitutional provision. I want to believe not even the President is exempt from prosecution under this article.

Finally, it is time to petition the Supreme Court as to whether contracts entered under the guise of government-to-government arrangements are immune to Constitutional provisions on the use of public resources.

Further, can contractual obligations that commit taxpayers directly or indirectly be hidden for disputes in jurisdictions outside Kenyan soil?

And even if they were held in such foreign capitals, whose law should apply in such disputes?