TECHNICAL EVALUATION

Mumias Sugar manager says company not yet leased

Reports indicate Tumaz and Tumaz won the tender after offering Sh27.6 billion

In Summary

• Rao said he was waiting for court clearance for the evaluation of the bids.

• The bidding for the indented leasing of the company’s core and non-core assets closed on August 31

P V Ramana Rao, appointed receiver manager for Mumias Sugar Company by KCB
P V Ramana Rao, appointed receiver manager for Mumias Sugar Company by KCB
Image: HILTON OTENYO

Mumias Sugar Company receiver manager Ponangipalli Rao has dismissed as misleading reports that an investor has won the tender to lease the firm.

Rao said reports on social media and a section of mainstream media that Tumaz and Tumaz enterprises had won the tender after offering Sh27.6 billion for a 20-year lease were untrue and misleading. 

The second-highest bidder, according to the reports, was Kruman Finances with Sh19.7 billion for a 25-year lease and the third was Transmara Group (Sarai) with Sh11.5 billion for a 20-year lease.

Other bidders were Pandhal Industries at Sh9.7 billion, Kibos Sugar at Sh8.8 billion, Devki at Sh8.4 billion and West Kenya Sugar at Sh3.5 billion.

A Mauritius-based company, Sucrie Des Mascarelgnes Ltd, participated in the bidding but did not disclose the value of its bid.

“We opened the bids on the indented leasing of Mumias Sugar assets on October 6, but the technical and financial evaluation is pending before we declare the winner,” Rao told the Star on Tuesday.

Rao said he was waiting for court clearance for the evaluation of the bids.

In June, the receiver manager was summoned by the Senate Standing Committees on Agriculture, Livestock and Fisheries over the bidding and directed to restart the tendering process in a transparent manner.

The process has been dogged by controversies and court cases that delayed efforts to revive the company that went down in 2018 under heavy debts and inadequate supply of raw materials.

The bidding for the indented leasing of the company’s core and non-core assets closed on August 31, but could not be opened for evaluation because of a court order obtained by some shareholders.

Gakwamba Farmers’ Co-operative Society Ltd, one of the shareholders, had filed an application in the High Court seeking orders to prohibit Rao from acting as receiver manager and from advertising to lease its assets. 

But in a ruling delivered on Monday, High Court judge W A Okwany allowed the receiver manager to proceed and open the bids.    

“To my mind, the opening of bids, in this case, is not of interest to the specific bidders only but also a matter of national concern, considering the public interest that this case has so far generated,” the judge said.

“I am of the view that the opening of any bids should not be the physical opening of envelopes per se but should include a transparent declaration or disclosure of the names of the bidders and the nature of their bids. I do not see how such a declaration can prejudice any party to this suit.” 

Edited by A.N