Muhoroni Sugar Company requires at least Sh700 million to clear arrears owed to staff, farmers and transporters.
Workers are owed more than Sh240 million in salary arrears for six months. A senior workers’ union official, who sought anonymity, said the arrears accrued from March to August last year.
The official said they have unsuccessfully sought to have them cleared. He urged President Uhuru Kenyatta to intervene. The company has more than 2,000 workers — permanent staff and casuals.
The firm is currently only paying salaries without remitting statutory deductions, the official said. “We are not getting gross salary. Deductions such as loans, sacco and insurance fees are not being remitted on time as required,” he told the Star on phone on Tuesday.
The union official said some workers’ belongings risk being auctioned by banks. “We have been served with letters from banks for failing to pay loans on time,” he said.
Muhoroni also owes farmers and transporters Sh474 million in arrears accrued from April to August 2017 and January to August last year.
Most transporters are also farmers. Of the Sh2.6 billion payout pledged by Uhuru last year, Muhoroni is expected to receive Sh400 million.
The company’s receiver manager Francis Ooko said they are paying farmers upon cane delivery. He said they are paying workers monthly.
Two months ago, Agriculture CS Mwangi Kiunjuri said the Sh2.6 billion payout will be used to settle debts owed to farmers.
Kenya National Federation of Sugarcane Farmers Muhoroni branch chairman Charles Anyumba asked the government to release money to settle their arrears.
He said farmers are suffering as they lack money to pay their children’s school fees. “Why should we continue to suffer yet we supply canes to state-owned millers?” Anyumba asked.
He said farmers should be getting money weekly, but that has not been happening.
Anyumba said farmers are paid Sh3,100 per tonne of cane delivered.
Federation secretary general Noah Opiyo urged the government to allocate enough money to address the problems plaguing the firm.