Stakeholders in the sugar sector in Western Kenya have petitioned the government to clear workers' arrears before plans to lease state-owned millers are effected.
The Kenya Sugar Plantation and Allied Workers Union secretary general Francis Wangara regretted that the government's move to write off the public sugar mills debts did not cater for the workers' arrears.
Wangara said the debts amounted to about Sh3 billion for the five state millers.
“I want to ask the government to consider offsetting the arrears before plans to lease the millers are effected, “he said, noting that passing over the debts to new investors will inflict more miseries on the employees.
Already, the government has started the process of leasing out the five sugar millers which are Chemelil, Miwani, Muhoroni, Nzoia, and South Nyanza companies.
The Agriculture and Food Authority has invited local and international investors (individual or consortium) familiar with the industry to submit their expression of interest.
“In pursuit of increased competitiveness and effective service in the sugar sector, the government of Kenya intends to lease out the five state-owned sugar factories through long-term lease, which will transfer the right of use of each factory to the lessee “as is where is” for redevelopment and operation, “the advert reads in part.
AFA Director Solomon Odera said In preparation for this, the government —through the authority — has commenced the programme through approving the restructuring of the balance sheets of each company.
This is by a debt write off for amount owed to it and the former Kenya Sugar Board/Commodities Fund as at December 31, 2019, write off tax penalties and interest as at June 30, 2009 and any additional interest and penalties that have accrued since then.
“The objective of this is to facilitate turnaround of these sugar companies to profitability through modernisation and efficient management which will in turn enhance competitiveness in Kenya, EAC, COMESA and global market.
“Government through AFA wishes to engage investors with world class experience to redevelop the factories into large sugar complexes and manage them over a leased period of 25 years,” stated the advert.
The expression of interest must be submitted to the AFA director general on or before August 3 and successful bidder will be made public on August 4.
The sugar sector plays a significant role in the country’s socioeconomic development including food security, employment creation, rural development and a source of livelihood for over eight million Kenyans.
It is also a source of income to over 400,000 smallholder farmers who supply over 90 per cent of the cane.
Edited by EKibii
