NAIROBI, Oct 25 (Reuters) – In a significant development for public-private partnerships in Kenya, the High Court has suspended a $736 million agreement between the state-owned Kenya Electrical Transmission Company (KETRACO) and India’s Adani Energy Solutions, which was signed earlier this month to construct and operate vital power infrastructure, including transmission lines.
Context of the Agreement
The deal was intended to address persistent power outages in the country and stimulate economic growth, as stated by the energy ministry on October 11. The ministry emphasized that the project would be instrumental in alleviating frequent blackouts that have plagued the Kenyan power supply.
Court Ruling
The court’s suspension of the agreement comes in response to a legal challenge initiated by the Law Society of Kenya. The judges ruled that the Kenyan government is prohibited from advancing the 30-year deal with Adani Energy Solutions until the court addresses the allegations presented in the lawsuit.
Legal Challenge
The Law Society has characterized the power deal as “a constitutional sham,” alleging that it is marred by secrecy and lacks transparency. They further argue that KETRACO and Adani Energy Solutions did not engage in meaningful public participation regarding the project, a crucial requirement under Kenya’s Public Private Partnerships Act of 2021. The act mandates that private sector developments involving public projects must involve thorough consultation with the public.
Government’s Defense
In its defense, the Kenyan energy ministry asserted that a competitive bidding process was adhered to, claiming the agreement was executed in accordance with legal frameworks. However, this assertion has not quelled concerns raised by various stakeholders.
Broader Implications
The Adani Group, founded by Indian billionaire Gautam Adani, has recently stirred controversy in Kenya not only for the power line project but also for another proposed public-private partnership to lease and expand the country’s main airport for 30 years. This airport deal has also faced legal scrutiny from the Law Society of Kenya and the Kenya Human Rights Commission, which argue that it is financially burdensome, threatens jobs, and fails to provide value for money.
Response from Adani Group
As of now, a spokesperson for the Adani Group has not responded to inquiries regarding the court’s suspension of the power deal or the challenges posed by the Law Society of Kenya.
Conclusion
The suspension of the Adani power line deal represents a pivotal moment for public-private partnerships in Kenya. It underscores the necessity for transparency, accountability, and genuine public involvement in major infrastructure projects. The court’s eventual decision on the legal challenge will likely have significant repercussions for future collaborations between the Kenyan government and private enterprises.
