Lack of investor blamed for stalled Sh100m Malava milk processing plant

Kakamega residents will have to wait longer for the construction of a milk processing plant. 

Deputy Governor Ayub Savula has said the completion of the proposed plant has been delayed because the county is still looking for an investor.

“The process of procuring an investor for the plant is ongoing and we will soon settle on one to equip and run the factory,” Savula told the Star in his office.

The county asked the contractor to go slow, to wait for the specifications of the equipment that the investor will bring in.

Savula said one investor from Uganda and several local ones, including Githunguri Dairies, have expressed interest in running the project.

The dates for the commencement of operations by the plant will be determined by the successful investor.

Auditor General Nancy Gathungu has flagged the project at Tumbeni in Malava subcounty for stalling, despite having consumed over Sh50 million taxpayers’ money.

Gathungu, in her audit report for Kakamega County Executive for 2023-2024, said the contract time had already lapsed.

The report dated January 29, said the project stalled at 76.5 per cent and the contractor had been paid Sh54,253,997 out of the total contract sum of Sh108,091,679, translating to 51 per cent of the cost.

The tender for the project was awarded to a local contractor on September 16, 2019, and was expected to be complete and operational by November 20, 2020.

The timelines were later varied to October 31, 2023, for a contract period of 202 weeks, according to the audit.

The report further noted that no evidence was provided for audit on whether due diligence on the winning bidder was conducted.

One of the four contractors who submitted their bids for the tender was disqualified for lacking a single business permit, but a review of the contractor's details on IFMIS indicated that the permit had been attached, contrary to the evaluation committee report.

The milk processing plant was envisaged to process over 50,000 litres of milk daily and create over 1,500 jobs.

The programme, alongside the Smart Dairy Farms, was aimed at improving social and economic standards through improved nutrition and self-employment.

It was part of the county government’s plan to develop the dairy sub-sector to help the residents diversify from over-reliance on sugarcane farming and boost food security.

Kakamega is leading counties which are holding huge amounts of money in stalled projects at Sh7.2 billion, according to Gathungu.