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December 11, 2018

Lawsuits derail factory ambition

A sugar cane plantation at Nzoia Sugar belt./FILE
A sugar cane plantation at Nzoia Sugar belt./FILE

When Busia Sugar Industries started building the first factory in the county in May 2014, it never expected to be bogged down with legal battles. To date it has weathered 12 lawsuits, with three pending.

Since Independence, leaders and stakeholders have been pushing to have any factory built. It was therefore a great relief when construction of the first-ever factory began for Sh4 billion at Busibwabo, Matayos subcounty.

Six months later a resident was paid by BSI’s competitor to file lawsuits at the High Court in Busia, Bungoma, Kitale, Kisumu and Nairobi to stop construction.

Twelve cases have been determined in BSI’s favour.

Justifiably, farmers who had already signed contracts with the company to supply sugarcane were angry and protests broke out. Leaders and stakeholders took to the streets, markets, trading centres and the county headquarters in Busia town to vent their anger. The protests spread all the way to Bungoma and Kitale towns.

The company’s lawyer, Hassan Ali, said the first case was based on environmental issues, even though the National Environmental Management Authority and the former regulator, the Kenya Sugar Board, had given their clearance and licenses to proceed with the construction works.

It is mandatory for any company wishing to build a sugar factory anywhere in the country to follow to the letter stringent procedures and regulations laid down by the government.

There’s cut-throat competition for dwindling sugarcane. Some of BSI’s contracted farmers’ crop is being targeted as the endless legal suits continue. The lawsuits are taking a toll on the investor, who initially set out to put Sh3.8 billion into the factory. The delays have pushed up the construction costs.

The situation is so bad that on occasion President Uhuru Kenyatta, while touring development projects, has been forced to implore the warring parties to terminate the legal battles and resolve their differences amicably. Of course, to no avail.

Initially BSI’s parent company, Africapolysac Ltd, had planned to complete construction and swing into full production within 10 months after the groundbreaking in May 2014.

The company had compensated more than 100 families that gave up their land for the factory. It had also put up ultramodern primary and secondary schools, and a police station for the local community.

The groundbreaking ceremony was presided over by Busia Governor Sospeter Ojaamong.

BSI administrator Omar Dhadho said the factory is expected to create 500 jobs directly and hundreds of others indirectly. More than 30,000 farmers would be contracted in the long run to supply sugarcane all year round. But all this has been threatened by the endless legal tussles.

Despite the legal wars, the factory is 95 per cent completed. It is expected to crush 3,000 tonnes of sugarcane per day once up and running, supplied by 4,000 sugarcane farmers already contracted to plant the crop on 8,000 acres.

As it is the farmers hands are tied, with a crop in the field that should have been harvested for processing, but with nowhere to take it.

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