Sale of State sugar firms on after suit flops

Saturday November 11 2017

A crane offloads sugarcane from a tractor. PHOTO | TONNY OMONDI

A crane offloads sugarcane from a tractor. PHOTO | TONNY OMONDI 

By BRIAN WASUNA
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Five State-owned sugar millers are up for sale again after the  High Court dismissed a petition filed by western Kenya political leaders to block the transaction.

Kisumu governor Anyang’ Nyong’o, former Gem MP Jakoyo Midiwo, the Council of Governors, Migori and Bungoma counties had in the petition claimed the national government has no authority to wade into privatisation of sugar firms because animal and crop husbandry are devolved functions.

Yesterday, Justice Edward Muriithi ruled the court intervene in the standoff between the Privatisation Commission and the county leaders before alternative dispute resolution mechanisms are exhausted.

That implies that the sale process initiated earlier is on.

The Privatisation Commission had in 2015 kicked off the process of selling majority stakes in Nzoia, South Nyanza, Chemelil, Muhoroni and Miwani sugar companies. Two of the businesses, Muhoroni and Miwani, are in receivership.

The move sparked a war with leaders from the sugar belt, who insisted that only county governments have the authority to deliberate on the privatisation of public firms in the agriculture industry.

Alternative routes

Justice Muriithi has suggested that the dispute be resolved through alternative dispute resolution vehicles such as mediation, negotiations and arbitration as prescribed by the Intergovernmental Act, 2012.

“There is no suggestion that the structures of alternative dispute resolution under the Intergovernmental Act, 2012 cannot remedy the situation manifested in the dispute about whose function between the national and county governments is the business of milling of sugar,” Justice Muriithi ruled.

“Such reasonable efforts towards resolution of the dispute have not been exhausted or failed. The court cannot, therefore, be asked to resolve the dispute anyhow now that the matter is before court. That would be usurping the prior jurisdiction of the organs of Intergovernmental Relations Act,” he added.

Justice Muriithi’s decision has lifted a court order earlier issued in 2015 that barred the Privatisation Commission from completing the disputed process.

The commission had announced plans to sell a 51 per cent stake in each of the five sugar companies to reputable strategic partners through a bidding process.

It added that another 24 per cent stake in each of the firms would be sold to out-growers and employees.

Under the plan, the government will retain a 25 per cent stake in each of the millers but with an option of selling its share in future.

Parliament approved the privatisation plan in April 2015.