BITTER SUGAR POLITICS

JOSEPH BARASA: Why Mumias Sugar receiver manager must resist pressure from cartels

If Rai is given the opportunity to acquire Mumias Sugar, he will be in control of the entire market

In Summary

• One thing that is playing out clearly is the fact that there are efforts by Malala to see that Raval is not awarded the lease.

• In as much as Rai has all the rights just like any other investor to lease the company, we must not stop asking ourselves very fundamental questions.

Mumias Sugar Company Limited
Mumias Sugar Company Limited
Image: FILE

When billionaire Narendra Raval of Devki Steels wanted to lease Mumias Sugar Company, his efforts were thwarted by some Western leaders led by Kakamega Senator Cleophas Malala on the grounds that the deal was not above board.

Last week, Senator Malala was heard saying at a funeral that he objected efforts by Devki to lease the troubled miller to have a fair process where all stakeholders together with the members of the public would witness the exercise for transparency purposes.

Malala went ahead to hint that the lease would be awarded to the highest bidder from the eight bidders but forgot to mention if other factors would be considered before one is declared a winner.

When the bids were opened last week, it emerged that US-based company Tumaz and Tumaz Enterprise, which is associated with Julius Mwale the man behind Mwale Medical and TecnoCity, had topped the list after it quoted Sh26.7 billion with three others quoting slightly higher than Sh10 billion with Jaswant Rai quoting Sh8.5 billion while Raval quoted Sh3.5 billion.

One thing that is playing out clearly is the fact that there are efforts by Malala to see that Raval is not awarded the lease.

In as much as Rai has all the rights just like any other investor to lease the company, we must not stop asking ourselves very fundamental questions.

Rai alone has three sugar factories in Kenya namely Sukari, West Kenya, Olepito Sugar and Kinyara Sugar in Uganda. If he is given the opportunity to acquire Mumias Sugar, then he would be in control of the entire market, something that we should be worried about as it would lead to a monopoly.

The Sugar Directorate data shows Rai alone controls 45 per cent of total sales — West Kenya at 29 per cent, Sukari 11 per cent and Olepito two per cent.

The appointed Receiver manager for Mumius Sufgar Ramana Rao had been quoted earlier as saying that he was not only looking for an investor with deep pockets but one who is serious to make the revival a reality, hence considering other perimeters.

Rao was of the opinion that a private treaty was as much better option instead of a public tendering. In addition he said the private treaty would be less expensive, faster and the receiver to conclude the technical and financial assessment of the bidders in the shortest period.

Initially Devki Group boss was planning to inject Sh5 billion to revive the once Giant miller.

Therefore, we should not allow a repeat of what happened to a once paper giant Pan Paper Mills in Webuye, which even after being officially opened by President Uhuru Kenyatta is now being used as a warehouse to store cheap illegal sugar.

 

Joseph Barasa

Via email