India’s Adani Group has faced another setback in its overseas expansion plans as Kenya’s High Court blocked a controversial government deal to allow the conglomerate to manage the country’s main airport.
The court order, issued on Monday, temporarily obstructed the government’s proposal to grant a 30-year lease to the Adani Group’s infrastructure-focused company, owned by Gautam Adani, India’s second-richest man, to operate Jomo Kenyatta International Airport.
The Law Society of Kenya and the Kenya Human Rights Commission were among the petitioners in the high court, arguing that the estimated $1.85 billion needed to revamp the airport could be raised without a multi-decade leasing contract.
In their legal application, they claimed that the Adani proposal was “unaffordable, threatens job losses, exposes the public disproportionately to fiscal risk, and offers no value for money to the taxpayer.” They also contended that the deal was “irrational” under Kenya’s constitution.
The Kenyan legal challenge is just the latest blow to the Adani Group’s efforts to expand its overseas presence. When the proposed takeover by India’s largest private airport operator was revealed in July, protests erupted in Kenya, with police blocking demonstrators who wanted to shut down the airport in opposition to the deal.
The Kenyan aviation workers’ union also opposed the plans, arguing that they would lead to local job cuts and the employment of foreigners.
The Kenya Airports Authority defended Adani’s proposal, stating that the refurbishment of the facility and the investment in a new terminal and runway were needed to update the “aging infrastructure” at the largest airport in East Africa’s most advanced economy. However, the High Court ruling has put a halt to this plan, at least temporarily.
The controversy surrounding this deal in Kenya is not unique. Adani has faced resistance in other countries as well. In Australia, the conglomerate has faced significant opposition from environmentalists and Indigenous communities over its proposed coal mine project in Queensland.
The project has been met with concerns over its potential impact on the Great Barrier Reef, climate change, and the rights of traditional landowners.
The Adani Group has also faced criticism for its environmental practices in India, with activists accusing the company of illegally diverting water for its coal mines and inadequate environmental impact assessments.
These controversies raise questions about the social and environmental responsibility of multinational corporations like the Adani Group.
In an era where sustainability and community engagement are increasingly important factors in business decisions, the resistance faced by the conglomerate reflects a growing awareness and demand for companies to prioritize these aspects.
Adani has been actively pursuing its international expansion efforts despite facing damaging fraud allegations from US short seller Hindenburg Research.
The company, which has consistently denied these claims, has recently secured a port deal in Tanzania, indicating its commitment to expanding its global footprint.
Adani’s business ventures have been closely aligned with the infrastructure goals set by Indian Prime Minister Narendra Modi.
However, the conglomerate has faced criticism and setbacks in its overseas deals. Following the controversial coup in Myanmar earlier this year, Adani decided to pull out of the country.
Additionally, its ports and energy agreements in Sri Lanka and Bangladesh have sparked local resentment and raised concerns about the fairness of the procurement process.
The main opposition party in India has accused Modi’s government of using its diplomatic power to advance Adani’s international interests.
This alleged favoritism has further fueled protests and ignited anger against India and its government, as evident in the widespread protests that ensued after Adani proposed a takeover of an airport in Nairobi, Kenya.
Another controversial agreement made by Adani was the supply of coal power to Bangladesh from an Indian plant, which activists argue is prohibitively expensive.
Adani maintains that the cost is competitive but has expressed concern about a $500 million payment backlog from Bangladesh’s new government, deeming it “unsustainable.”
While Adani and the Indian government refute claims of any undue favoritism, critics continue to question the conglomerate’s influence and potential benefits derived from such connections. Adani Group has not yet responded to requests for comment on these matters.
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