Adani Airport Controversy in Kenya Discredits India’s Reputation in Africa

Earlier this month, a long-simmering dispute involving the Adani Group erupted into a full-blown aviation crisis with hundreds of passengers stranded at Jomo Kenyatta International Airport (JKIA). Kenya Aviation Workers Union (KAWU) members are protesting against the build-and-operate agreement allegedly in the works with the Adani Group, which critics say is expected to result in significant job losses and impose additional tax burden on Kenyans.

Union workers are demanding the government disclose all details of the proposed agreement, which remains shrouded in secrecy. They have found support from opposition leaders, who are calling for the project to be abandoned.

In response to a petition by the Kenya Human Rights Commission and Law Society of Kenya to stop the deal, the high court has granted a temporary order, suspending the deal pending the determination of the case. While the government’s position is that only a legally non-binding “head of terms” agreement has been signed with Adani, senators allege that the “takeover” project is a “done deal.”

This controversy surrounding the deal comes soon after weeks of youth-led demonstrations against the Finance Bill, which resulted in President William Ruto not only withdrawing the bill but also replacing his entire Cabinet, with the promise of tackling corruption within the bureaucracy.

The Ruto government is in a particularly precarious position with little room left to negotiate with the public. Not only has it brought back focus on corruption and transparency within the government but also the involvement of an Indian conglomerate has put New Delhi’s hard-earned reputation as a trusted partner in Africa at stake.

The project to upgrade JKIA has a long, troubled history. In 2012, Kenya began work on a $653 million expansion projection at JKIA, which would involve the construction of a new terminal and runway under an agreement with Chinese companies, Anhui Civil Engineering Group and China National Aero-Technology International Engineering Corporation. Launched in 2013, the tender was subsequently canceled in 2016, citing “material differences between the terms of the request for proposal and the construction contract.” Following a long and arduous process, which even moved to the International Court of Arbitration, Kenya Aviation Authority (KAA) agreed to pay $4 million to the Chinese contractors in an out-of-court settlement.

In 2021, reports emerged that KAA was planning to revive the project by constructing a new terminal, which would be operational by 2027. In 2023, the then-minister of roads and transport revealed that the expansion project would proceed under a public-private partnership (PPP) model, the tender process for which would begin on January 15, 2024. No advertisement had been released by the KAA until May 2024 when an invitation for bids was published for “Provision of Consultancy Services For PPP Project Of Construction Of New Terminal Building & Associated Works At JKIA.”

Moreover, it was only in June 2024 that the Cabinet approved the JKIA Medium-Term Investment Plan. However, the KAA revealed that it received the proposal from Adani Airport Holdings of India in March 2024, after a whistleblower claimed in a social media post that JKIA would be leased to the Indian conglomerate.

Initially, it was reported that the proposal came after the government approved the investment plan. This raises some key questions about whether due diligence was done for the bidding and if a competitive process was put in place.

Despite the government’s insistence that no deal has been signed, it is clear that the agreement is in its advanced stages. Amid protests, Kenyan officials have already completed a due-diligence visit to India, just days after Adani Enterprises established a Kenyan subsidiary called Airports Infrastructure PLC to “take over, operate, maintain, develop, design, construct, upgrade, modernize, and manage the airports.” The next steps would involve stakeholder engagement, approval from the National Treasury, clearance from the attorney general, and Cabinet approval.

With Indian private companies playing an increasingly important role in India’s foreign policy making, New Delhi is left in a vulnerable position of losing trust amongst the Africans. New Delhi has built for itself the reputation of a reliable and trustworthy investor, which is touted as a model for other countries.

Under Prime Minister Narendra Modi, India-Africa relations soared to new heights, exemplified by the African Union’s permanent membership in the G-20 under India’s presidency. In recent years, India has emerged as one of the top five investors in Africa, with investments estimated to be around $74 billion.

Despite the criticism that Indian projects spearheaded by state-run companies face challenges with project delivery and implementation, India has successfully carved a niche for itself as a strategic partner by successfully employing soft power tools. Several private Indian companies such as Tata Motors and Bharti Airtel are well-established players in the African industry, complemented by the presence of a rich Indian diaspora.

While the Adani deal does not directly involve the Indian government, the group’s alleged links with the ruling Bharatiya Janata Party have garnered international attention and raised speculations. Gautam Adani has said that his overseas investments are “sound business decisions,” which also “help India and the region’s interests.” In the face of growing international pressure on the Adanis, especially since the Hindenburg report, this association, however distant and tenuous, comes with more challenges than benefits for New Delhi.

Adani’s overseas projects in Bangladesh and Sri Lanka are facing similar challenges, further complicating matters for New Delhi. While India’s Ministry of External Affairs has distanced itself from the projects and urged associated parties to deal with them at an “appropriate level,” the lack of transparency around how private companies liaise with Indian authorities overseas complicates matters.

At a time when India is leaning more toward the private sector to fulfill its overseas economic goals, New Delhi needs to introspect and take necessary measures to ensure its credibility remains unaffected.