Public-private partnership projects with financial obligations for the State must receive parliamentary approval, the High Court has said, strengthening legislative oversight of infrastructure deals financed by taxpayers.
The court declared parts of the Public-Private Partnerships (PPP) Act unconstitutional after finding that the law excluded Parliament from approving PPP arrangements that create government expenditure, guarantees, public debt or other financial liabilities.
The judge said Parliament’s constitutional role in approving public expenditure and public liabilities cannot be bypassed merely because a project is structured as a PPP or funded initially by private investors.
The judgment followed a petition by Katiba Institute challenging provisions used in the proposed concessions involving Jomo Kenyatta International Airport (JKIA) and the Kenya Electricity Transmission Company (Ketraco).
The two projects linked to India’s Adani Group had been cancelled before the petition was heard, but the judge said their cancellation did not remove the wider constitutional questions raised.
The dispute centred on whether the Executive, acting through the PPP Committee, could approve arrangements with long-term financial consequences without Parliament’s involvement.
Katiba argued that Sections 59, 60, 61, 62 and 72 of the Act allowed the Executive to exercise powers reserved for Parliament under the Constitution.
The court agreed in part, declaring Sections 59, 60 and 72 unconstitutional to the extent that they failed to provide for parliamentary approval where a PPP creates government expenditure, guarantees, public debt or other liabilities.
The court, however, suspended the declaration of invalidity for six months, allowing Parliament time to amend the Public Private Partnerships Act and align it with constitutional requirements on public expenditure, guarantees, borrowing and other public liabilities.
The judgment does not require legislators to approve every partnership individually. Approval is necessary where the arrangement commits the national government to financial responsibility.
That may include payments to a private operator, State guarantees, public borrowing, government contributions or liabilities that could eventually fall on taxpayers.
The court stated that a project does not escape parliamentary scrutiny merely because private investors provide the initial capital or because it is described as a concession rather than ordinary public borrowing.
Katiba had also challenged provisions allowing authorities to decide whether privately initiated proposals should undergo open competitive tendering. The organisation argued that Sections 44(5) and (6) undermined Article 227, which requires public procurement to be fair, transparent, competitive and cost-effective.
The High Court rejected that part of the challenge. It found that the law may permit alternative procurement methods where justified, but public agencies remain bound by the Constitution.
A privately initiated proposal cannot be used to favour a particular company, avoid competition or deny the public value for money. The court thus preserved the mechanism while placing limits on how it may be applied.
The petition was filed amid controversy over two proposed Adani concessions. The court papers identified a proposed 30-year concession for the JKIA by Adani Airports Holdings and a Sh95.68 billion, 30-year power transmission concession involving Ketraco and Adani Energy Solutions, according to the published case record.
Katiba said the projects had been developed through privately initiated proposals and were being advanced without adequate parliamentary participation. It also questioned whether the process met constitutional standards of openness, accountability and fair competition.
The government and other respondents opposed the petition, arguing that the court should not intervene in matters governed by the PPP framework and that some disputes belonged before the PPP Petition Committee.
The court held that the petition raised questions beyond the two transactions. These included Parliament’s role in public finance, protection of public resources and accountability of agencies negotiating long-term concessions.
The six-month suspension means the affected provisions remain temporarily operative while lawmakers consider amendments.
The court is expected to return to the matter on May 11, 2027, for compliance checks and directions.
