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CS Mbadi - Why gov't won't pay a cent to Adani after deal collapse | Pulselive Kenya

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Amos Robi

The government has taken a firm stance, declaring it will not compensate the Adani Group after President William Ruto terminated a high-stakes deal with the Indian conglomerate.

Treasury Cabinet Secretary John Mbadi assured Kenyans that the agreement's unique structure meant taxpayers wouldn’t bear the financial burden.

Addressing the media after President Ruto’s State of the Nation address on Thursday, November 21, Mbadi clarified that the arrangement with Adani was under a Privately Initiated Partnership (PIP).

He explained that PIP is unlike conventional procurement processes and offers flexibility to cancel talks at any stage without incurring major costs.

<blockquote>I don't see the possibility of losing any money. Compensating them for what? The only thing is the amount they paid, which will be refunded because this was not a mutual termination.</blockquote>

<h3>Adani deal stopped in its tracks</h3>

The cancelled deal, which involved revamping the Jomo Kenyatta International Airport (JKIA) and constructing power transmission lines, had barely moved past its initial stages.

Mbadi noted that due diligence was still ongoing, and no binding agreements had been signed.

<blockquote>In PIP, there are not many expenses involved, so what would you compensate them for? PIP is the most flexible method of procurement</blockquote>

<h3>Corruption concerns spark action</h3>

President Ruto’s decision to scrap the deal stemmed from alarming reports of corruption tied to the Adani Group.

According to the President, investigative agencies and international partners provided credible evidence that prompted swift action.

President William Ruto during his State of the Nation Address in parliament

<blockquote>I now direct procuring agencies within the Ministry of Transport and the Ministry of Energy and Petroleum to immediately cancel the ongoing procurement process for the JKIA Expansion Public-Private Partnership transaction, as well as the recently concluded KETRACO transmission line deals</blockquote>

The move now paves way for a fresh partnership with a different company to engage in government projects notably, the expansion and rehabilitation of JKIA.

Mbadi has emphasised that Kenya was lagging in the region when it came to the critical infrastructure with her neighbours well developed.

<blockquote>Rwanda has developed a serious airport, Ethiopia has an airport. Kenya cannot lag behind. We're losing our competitiveness as a hub. Therefore whether it is Adani or not, we must agree that someone must do our airports. It is not just airports alone, major projects. Let us not shy away from engaging Kenyans</blockquote>

Social Health Authority (SHA) offices in Nairobi

It also remains unclear how the government will proceed with Taifa Care [Universal Health Coverage] given the Adani group was part of the deals.

The Sh355B deal, which would have seen the Adani Group revamp Jomo Kenyatta International Airport (JKIA) and construct critical power transmission lines, was halted in its early stages

CS Mbadi - Why gov't won't pay a cent to Adani after deal collapse

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