Sarrai Group now faces bleak future in Mumias leasehold

President Ruto promises to find new investor to revive ailing sugar miller.

In Summary

•The eviction of former Mumias Sugar Company workers from their houses by Sarrai Group is among issues said to have angered the President. 

•There is also an issue of arrears amounting to Sh2.3 billion.

President William Ruto with leaders from Western Kenya at the Kakamega State Lodge on Thursday, December 8, 2022
President William Ruto with leaders from Western Kenya at the Kakamega State Lodge on Thursday, December 8, 2022

Sarrai Group's fight to cling on to a 20-year lease to operate the ailing Mumias Sugar Company now hangs in the balance.

This is after President William Ruto on Friday declared the government will find a new investor for the troubled miller.

The Uganda-based Sarrai Group is managing operations at the Mumias Sugar Company courtesy of a Court of Appeal decision that suspended the quashing of the lease awarded the Sarrai Group.

The lease award was quashed by High Court judge Alfred Mabeya.

Ruto who spoke to leaders from the Western region at the Kakamega State Lodge, during his tour of the region, assured residents that Mumias Sugar Company will soon have a new investor.

The President's remarks were the clearest indication that Sarrai Group which controversially won the tender to revive Mumias has technically been kicked out of the company.

Ruto said he will stick to the promise he made during campaigns that his administration will find a suitable investor for the ailing miller.

The eviction of former Mumias Sugar Company workers from their houses by Sarrai Group, and failure to pay their arrears amounting to Sh2.3 billion, are among the issues said to have angered the President.

“We are going to bring an investor whether he will be short or tall, black or white. We shall agree beforehand with the new investor that every month Sh100 million from Mumias Sugar Company be paid to the county government of Kakamega,” Ruto said.

He said his administration will pay off all the debts and get someone to fully operationalise the miller for the benefit of residents.

“No road has been constructed from Mumias Sugar Company money. Some people have not educated their children from Mumias Sugar Company. The company has just been gobbling national government money.”

The factory collapsed due mismanagement and efforts to revive it have been futile even after the national government sunk in close to Sh5 billion.

Ruto said there were many suitable investors eager for revival of Mumias Sugar Company.

“I want to give an assurance that we are going to change things in Mumias. The national government is going to pay off all the debts in Mumias so that we do away with debt burden.”

“There are many people willing to work with us. And let the Kakamega people decide what the money from Mumias Sugar Company will be used for,” the President said.

The deal for the Sarrai Group was that Sh20 million be paid to KCB every month until the debt owed to the bank by the miller is cleared.

 “I stood here I and told you we shall deal with issues about Mumias Sugar Company. I am standing here today to tell you that we are going to fix the problem. In Mumias we have spent a lot of government money almost Sh5 billion but the company until now is not benefiting the people of Kakamega,” Ruto said.

The President was annoyed by the fact the more than 8,000 acres the residents of Mumias donated for creation of the nucleus was not in use.

Sarrai Group was yet to plant sugarcane in the nucleaus as it was the case before the factory collapsed.

“In Mumias there is nucleus land which was donated by members of public. There expectation was that they will benefit from that land but after all those years, besides employment opportunities, the residents have not seen tangible benefits from Mumias Sugar Company,” Ruto said.

According to the President, the receiver manager Ramana Rao will not apply tricks during the award of tender to a new investor.

The head of state said he will be involved in the process of sourcing for new investor.

“Let nobody lie to you that another trick will be applied when awarding tender to the investor who will take over Mumias. I am going to be part of the process either directly or indirectly. Those people cannot trick me.” 

Former Kakamega Senator Cleophas Malala had earlier appealed to the President to find a long term solution to the issues surrounding Mumias Sugar.

“It will be unfair for me as a leader to keep quiet on issues about Mumias Sugar. Kindly President, look critically about Mumias and help in finding solution for the sake of residents,” Malala said.

“Mumias sugar is full of Ugandans. Our people have been denied job opportunities. Those former workers are now being evicted from their houses which is totally wrong,” the former senator added.

MPs Oscar Nabulindo (Matungu) and John Naicca (Mumias West) urged the President to prioritise the revival of the miller.

“It will take the investor who has been in Mumias many years to return the company to where it was before. We are therefore appealing for urgent measures from President,” Naicca said.

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