Mbadi struggles to explain Kenya Kwanza’s ‘skunk’ in Adani deal

National Treasury Cabinet Secretary John Mbadi has struggled to convince a Senate committee investigating a deal struck by the Ruto administration with Indian entrepreneur Adani when Mbadi was in opposition.

Facing his former minority colleagues in the Senate, Mbadi sought to explain why President William Ruto’s administration had given the task of modernising the Jomo Kenyatta International Airport to Adani Airport Holdings when other companies had expressed interest.

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

Kisii provincial senator Richard Onyonka produced three letters from companies wanting to do the project, including Adani, and asked Mbadi if there was any documentation to show that the other companies were rejected before Adani struck a deal.

“I would also like to ask Mbadi if he is aware that Indian Prime Minister Narendra Modi controls 58 percent of the Adani empire and the Sultanate of Abu Dhabi has a stake in the Adani empire, which currently has several subsidiaries that want to take over different sectors of the Kenyan economy,” Onyonka asked

He said other companies — GMR of India and Nexus Logic, a US firm — had also shown interest in the project. Onyonka produced letters addressed to the Principal Secretary Transport stamped by the Kenya Airports Authority, according to the receipt.

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

The CS informed the committee, chaired by Kiambu Senator Karungo Thangwa, that they had not received any letters from other companies that had shown interest in the JKIA deal apart from Adani. This irked the senators, who accused Mbadi of blocking access to Adani.

“I would like to request my brother Mbadi not to hold the gate for Adani Limited because all the government officials who appeared before this committee seemed to be clinging to the company instead of defending the interests of the country. I request him not to choose this path,” Onyonka said.

PPP CEO Christopher Kirigua, who accompanied CS to the meeting, told the committee that other companies had submitted proposals but the only proposal sent to the National Treasury was Adani’s. He said it was sent in April 2023.

Senator Busia Okiya Omtatah noted that information in his possession indicated that Kirigua had been appointed deputy head of mission at the Kenyan embassy in Washington and wondered who he was still guarding from entering the country.

Nairobi Senator Edwin Sifuna questioned Mbadi about submitting a private proposal, noting that the document showed that the proposal was submitted by Chief Secretary Transport Mohammed Dhagar and not the Kenya Airports Authority, which Sifuna said should be the responsible party.

Sifuna said that what Adani Limited had submitted was a self-declaration that was unauthorized. The senator wanted to know if Adani operated only in India. Mbadi said he did not know where else the company operated.

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

“Are you aware that former Cabinet Secretary for Transport Kipchumba Murkomen told the Senate last year that they would float an international tender for the development of JKIA? What changed when Adani got preferential treatment from the government?” Cherargei asked.

Senator-nominee Peris Tobiko told Mbadi that a company was building an airport in Rwanda at a cheaper price.

“As a cabinet secretary, I have no authority to stop the process because there are other agencies involved and if something is wrong, it will be dealt with accordingly. We all agree that our airports need to be improved,” Mbadi said.

He explained that the Directorate of Public Private Partnership has not approved any stage of the private proposal submitted by Adani Airport Holdings Limited for the takeover of Jomo Kenyatta International Airport.

The Cabinet Secretary informed the senators, who expressed dissatisfaction, that the bill is currently in the negotiation phase after being approved by the Public-Private Partnership Commission at its 47th regular meeting held on August 21, 2024.

He added that a team comprising the Kenya Airports Authority, State Department of Transport, State Legal Office and the Public Private Partnership Directorate of the National Treasury are in the process of conducting a comprehensive due diligence to establish the necessary capabilities of Adani Airport Holdings Limited to undertake the project.

“The Kenya Airports Authority is currently conducting a comprehensive due diligence exercise to establish the required capacity of Adani Airport Holdings Limited and engage stakeholders in the project to achieve public acceptance,” Mbadi said.

He stressed that the Kenya Airport Authority and Adani Airport Holdings Limited have not entered into a project development agreement in accordance with the provisions of Section 43(7) of the PPP Act, 2024 as the execution of a project development agreement is a discretionary requirement and not a mandatory requirement.

Mbadi informed the Senate committee that after receiving approval to advance the application to the project development phase, the applicant conducted a feasibility study which was sent to the Kenya Airports Authority for review.