Leaders from Kakamega County have claimed there was a scheme by influential individuals in government to frustrate efforts to revive the Mumias Sugar Company.
ODM youth leader Rashid Mohammed and a UDF party official from Vihiga county Khalid Njiraini said political games were at play to delay the release of Sh1 billion cash bailout to the miller.
“The plan is to ensure Mumias Sugar collapses and is placed under receivership so that those behind these political schemes can move in and buy the company,” said Mr Mohammed.
Mr Njiraini said the collapse of Mumias Sugar Company would be a big blow to western Kenya’s economy.
He questioned why the government had not fulfilled its pledge to release the bailout cash as promised.
The leaders spoke during the burial of an elder at Khayega market on Saturday.
But Mumias East MP Benjamin Washiali told the Nation.co.ke on Sunday that the bailout plan being arranged by the National Treasury was still on.
He said Sh500 million will come for the Sugar Development Levy while the balance would come from the Treasury.
“The government wants to make sure that any money released to the miller in form of a cash bailout is put to proper use,” said Mr Washiali.
The sugar miller’s managing director Coutts Otolo last Wednesday told Nation.co.ke that the firm has been struggling for the last two years with cash flow problems.
He said critical equipment needs to be replaced for the miller to work at full throttle and crush at least 7,000 tonnes of cane per day.
At the moment, no sugar is being produced. Only 700 24-pack cases of bottled water and 72,000 litres of ethanol are being produced per day.
“The problem at Mumias is historical. We inherited huge debts owing to diversified projects.
“We are worried that the situation at the firm has forced some farmers to abandon cane growing,” said Mr Otolo.
The firm expects to use the bailout cash to carry out a major maintenance of the production lines and pay farmers, whom it is at the risk of losing.