Mumias Sugar to get Sh3bn more in bailout
A tractor transports sugarcane to Mumias Sugar Company in the past. The company's management is negotiating with The National Treasury for an additional Sh3.14 billion bailout. PHOTO | FILE | NATION MEDIA GROUP
What you need to know:
- Mumias East MP Benjamin Washiali confirmed the bailout plan after a board meeting at the miller’s offices in Mumias on Monday.
- Mr Washiali said Mumias Sugar will receive the first tranche of the money after the ongoing three-month maintenance break.
- Mumias Sugar Company has, in the past two years, received Sh3.1 billion from the Treasury as part of the government’s effort to steer it back to profitability.
The management of Mumias Sugar Company is negotiating with The National Treasury for an additional Sh3.14 billion bailout.
Mumias East Member of Parliament Benjamin Washiali confirmed the bailout plan after a board meeting at the miller’s offices in Mumias on Monday.
Mr Washiali said Mumias Sugar will receive the first tranche of the money, which will be released in three phases, after the ongoing three-month maintenance break.
“The negotiations are in the final stages and the plan is to release the money in three phases in the ongoing efforts to turn around the fortunes of the miller,” said Mr Washiali.
The lawmaker, who was accompanied by board chairman Kennedy Mulwa, asked the management to ensure accountability.
PAYING FARMERS
He asked them to give priority to paying the Sh900 million owed to farmers for their delivered cane.
The miller has, in the past two years, received Sh3.1 billion from the Treasury as part of the government’s effort to steer it back to profitability.
A new turnaround plan by the management appears to have run into headwinds due to a crippling cane shortage and ageing equipment, leading to disruption in operations.
President Uhuru Kenyatta and his deputy William Ruto delivered a Sh1 billion cheque during a tour of the factory in 2014 while the second tranche was delivered between June 2015 and April 2016 to pay farmers’ arrears and rehabilitate machinery.
MONEY DIVERTED
“We regret that despite a commitment by the government to revive Mumias, the money meant for turning around the miller has been diverted and spent on wrong priorities,” Mr Washiali lamented.
He asked management to review salaries in a bid to cut down on its huge wage bill.
Mr Mulwa said the board was working with the government on the bailout to ensure the miller’s revival.
RAW MATERIAL
He said Mumias Sugar would have a new chief executive, having advertised the position two weeks ago.
“Our plan it to recruit a CEO who will win back the confidence of farmers and ensure that we have adequate raw material in the catchment to sustain our operations,” said Mr Mulwa.
He said the closure of the factory was meant to allow urgent repairs and maintenance work and ensure adequate cane for crushing when it reopens.
