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CORRIDORS OF JUSTICE

Court halts leasing of cash-strapped state-owned sugar companies

State plans to privatise five cash- stressed sugar mills to turn them around

In Summary

•The case was filed by five farmers and 45 others under the umbrella of Nandi County Sugarcane.

•The petition came barely two weeks after senators called for the halting of the process until thorough public participation is undertaken

Sugar cane farm near the Chemelil Sugar Company in Muhoroni
Sugar cane farm near the Chemelil Sugar Company in Muhoroni
Image: MAURICE ALAL

The High Court has temporarily stopped the government’s plan to lease out some cash-strapped state-owned sugar companies.

Justice S.M Githinji, sitting in Eldoret, ordered a temporary stoppage of the process pending the hearing and determination of a petition filed by a group of sugarcane farmers from Nandi County.

The case was filed by five farmers and 45 others under the umbrella of Nandi County Sugarcane farmers who are opposing the planned privatisation of the sugar mills.

 

 “Pending the hearing and determination of the application inter parties, the respondent should not lease the three state-owned sugar mills namely Chemelil Sugar Company Ltd, Muhoroni Sugar Company and Miwani Sugar Company Ltd  as alluded to in the gazette notice No.5473 of 2020 and gazette notice number of 6437 of 2020,” reads the order by Eldoret High Court Deputy Registrar.

The three are among the five financially stressed companies the government has earmarked for leasing to turn them around. Others are Nzoia and Sony Sugar companies.

The petitioners; David Kitur, David Sum, Edward Barngetuny, Charles Tanui and Jepchirchir Kibor sued Agriculture CS Peter Munya, Agriculture and Food Authority director-general … and Attorney General Paul Kihara.

The Interparty hearing is scheduled for November 10, 2020.

The petition came barely two weeks after senators called for the halting of the process until thorough public participation is undertaken to iron out fears surrounding the move.

The lawmakers claimed the privatisation was being driven by a clique of ‘tenderpreneurs’ who are only interested in the multi-million assets owned by the firms and not in reviving them to benefit farmers.

“If you look at Nzoia Sugar Company, the target is the 30,000 acres of the nucleus estate land. They are not interested in the factory; they just want the land,” Bungoma Senator Moses Wetang'ula said.

 

In July, CS Munya announced a waiver of Sh62.5 billion debts owed by the five sugar millers on to set the stage for their revival.

In the second step, the government said it would lease out the debt-free sugar millers to private investors to turn them around.

On July 10, the Agriculture and Food Authority invited interested local and international investors familiar with the industry to submit expressions of interest.

But the lawmakers lamented that planned leasing is pushed without proper engagement of farmers, local communities and county assemblies from the sugar belt region as well as Parliament.

“If you ask our county assemblies who are in the sugar belt regions they will tell you that they have not even seen an iota of any proposal that has been put before the governors,” Nandi Senator Samson Cherargei said.

Kericho Senator Aaron Cheruiyot said, “With the intended leasing of sugarcane factories, it is important that Parliament, which represents the people, be brought into the full attention on the details of this sale.”

“We know this is an arranged programme. This is not different from what was done to the Kenya Co-operative Creameries (KCC). These are old known games. They will undervalue. In fact, the interest is not even in the factories but the nucleus of those factories,” he added.

Kakamega Senator Cleophas Malala said the common mwananchi in the Western region has not been consulted. There has not been any public participation as pertains to the leasing of the sugar factories, he said.

“We shall be demanding thorough public participation. We want the farmers to take part in the negotiations and in this deal. We want thorough valuation reports to be tabled before the Committee on Agriculture,” he said.

“The people who want to buy sugar factories are not interested in the plant. They are interested in non-core assets. Mumias Sugar Company has stadiums, buildings here in Nairobi, land and five schools”.