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January 18, 2019

Mumias Sugar asks for Sh200 million bailout from Kakamega

A worker weighs and packs bags of sugar at the Mumias sugar factory in western Kenya February 24, 2015./REUTERS
A worker weighs and packs bags of sugar at the Mumias sugar factory in western Kenya February 24, 2015./REUTERS

The struggling Mumias Sugar Company has approached the Kakamega county government to assist its revival plan, governor Wycliffe Oparanya has said.

Oparanya said that the company directors led by chairman Kennedy Mulwa paid him a visit two weeks ago and asked that his administration gives support to the company to stabilise its operations.

In April, Oparanya said that his government was ready to help bail out the company if requested to by the firm.

Oparanya said that the company management had ignored the county government in preference for the national government which has been making piecemeal disbursements that have not helped revive the once giant miller.

The county government disbursed Sh 200 million to the company in 2014 under a sugar cane support revolving funds.

The disbursement however turned controversial after it emerged that the money was released to a private company and not Mumias sugar company accounts.

The money has since been returned.

Speaking at Eshibinga on Saturday, Oparanya said that the directors requested that the county government gives the company Sh 200 million to support its operations.

"I told them that for me to release the funds, DP William Ruto and Matungu, Butere, Mumias East and Mumias West must be present because when I disbursed Sh 200m to assist the company in 2014, some leaders claimed that I had embezzled the money," he said.

Oparanya said that he agreed with the directors to form a six-member committee to identify the problems ailing the company before developing an elaborate bailout programme.

The committee will comprise three members from the county government and three others from the company.

Oparanya has insisted that the National government releases its 19 percent shareholding in the company to the county government since agriculture is a fully devolved function.

The national government has been reluctant though.

The national government has disbursed Sh 3.7 billion to the company under its bailout programme but it still faces financial challenges.

Mumias Sugar owes farmers Sh 600million for sugarcane delivered.

The company has had problem on resuming full operations due to the lack of enough sugarcane.

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