Mbadi struggles to explain Kenya Kwanza 'skunk' in Adani deal

Treasury Cabinet Secretary John Mbadi. [File, Standard]

National Treasury Cabinet Secretary John Mbadi faced difficulty convincing a Senate committee investigating a deal made by the Ruto administration and Indian contractor Adani when Mbadi was in the opposition.

Facing former colleagues on the minority side at the Senate, Mbadi tried to explain why President William Ruto administration handed the job to upgrade the Jomo Kenyatta International Airport to Adani Airport Holdings while other companies had expressed interest.

Mbadi told the Senate Roads and Transport Committee that he was not aware that two other companies had shown interest in the project.

Kisii Senator Richard Onyonka tabled three letters of companies seeking to carry out the project, with Adani being one of them, and asked Mbadi whether there was any documentation to show that the other companies were turned away before Adani got the deal.

“I would also like to ask Mbadi whether he is aware that Indian Prime Minister Narendra Modi controls 58 per cent of the Adani empire and Sultanate of Abu Dhabi has shares in Adani empire which now has several affiliates that want to take over various sectors of the Kenyan economy,” asked Onyonka

He said other companies—GMR from India and Nexus Logic an American company—had also shown interest in the project. Onyonka tabled letters addressed to the Principal Secretary Transport stamped by Kenya Airports Authority as received. 

Mbadi responded that he was not sure the letters presented by Onyonka were received by the Public Private Partnership Directorate at the National Treasury, which appeared to contradict Roads and Transport Cabinet Secretary Davis Chirchir, who told the committee that there were no such letters.

The CS told the committee, chaired by Kiambu Senator Karungo Thangwa, that they had not received any letters from other companies that have shown interest in the JKIA deal other than Adani. This irked the Senators, who accused Mbadi of gatekeeping for Adani.

“I would like to ask my brother Mbadi not to gate keep for Adani Limited since all government officials who have come before this committee have appeared to be holding brief for the company instead of championing the interests of the country. I am asking him not to take that route,” said Onyonka.

PPP Director General Christopher Kirigua, who accompanied the CS at the sitting, told the committee that other companies made proposals but the only proposal sent to the National Treasury was that of Adani. He said it was sent in April 2023.

Busia Senator Okiya Omtatah pointed out that information in his possession showed that Kirigua had been appointed Deputy Head of Mission at the Kenyan Embassy in Washington, DC and wondered whom he was still gate keeping for before he leaves the country.

Nairobi Senator Edwin Sifuna questioned Mbadi about the submission of the privately initiated proposal, noting that the document showed the proposal was submitted by Transport Principal Secretary Mohammed Dhagar rather than the Kenya Airports Authority, which Sifuna argued should have been the responsible party.

Sifuna said what was presented by Adani Limited was a self-declaration which was unauthorized. The Senator sought to know whether Adani  operates only in India. Mbadi said he was not aware where else the company operates.

Nandi Senator Samson Cherargei asked Mbadi if he was aware that Adani Group had affiliates in the country and that it was positioning itself to take over various sectors of the economy. The CS said he was not aware of any.

“Are you aware that the former Transport Cabinet Secretary Kipchumba Murkomen told the Senate last year they will float internationally the tender to develop JKIA? What changed with Adani getting preferential treatment from the government?” asked Cherargei.

Nominated Senator Peris Tobiko told Mbadi that a company was doing an Airport in Rwanda in a cheaper rate.

“As the Cabinet Secretary, I have not authority to stop the process since there are other agencies that are involved in the matter and if there is anything wrong, the matter will be handled accordingly. We all agree that our airports need to be improved,” said Mbadi.

He was at pains to explain that the Public Private Partnership Directorate has not approved any stage of Privately Initiated Proposal by Adani Airport Holdings Limited for takeover of Jomo Kenyatta International Airport.

The Cabinet Secretary stated to the Senators who expressed disatisfaction that the Project is currently at negotiation phase following approval by the Public Private Partnership Committee at its 47th Ordinary meeting held on August 21, 2024.

He said that a team comprising of Kenya Airports Authority, the State Department of Transport, the State Law Office and Public Private Partnership Directorate of the National Treasury is in the process of undertaking comprehensive due diligence exercise to establish the requisite capacity of Adani Airport Holdings Limited to undertake the project.

“Kenya Airports Authority is currently in the process of undertaking comprehensive due diligence exercise to establish the requisite capacity of Adani Airport Holdings Limited and stakeholder engagement of the Project for social acceptance,” said Mbadi.

He emphasised that the Kenya Airport Authority and Adani Airport Holdings Limited did not enter into a Project Development Agreement as provided in Section 43(7) of the PPP Act, 2024 since entering into a Project Development Agreement is a discretionary and not mandatory requirement.

Mbadi told the Senate Committee that upon receiving approval for the proposal to advance to the Project Development Phase, the Proponent undertook a feasibility study that was submitted to the Kenya Airports Authority for review.