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State-owned sugar firms to be sold in privatisation plan

Wednesday April 24 2019

Chemelil Sugar

This photo taken on September 28, 2018 shows activities at Chemelil Sugar Company in Kisumu. The firm, and other sugar firms owned by the national government, will be sold. PHOTO | FILE | NATION MEDIA GROUP 

 NYAMBEGA GISESA
By NYAMBEGA GISESA
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The fate of the State-owned Nzoia, Miwani, Muhoroni, Chemelil and Sony sugar companies has been sealed after a task force set up to rescue the crippled sector recommended their privatisation.

The Nation has established that a meeting of various stakeholders held last month reached the decision to dispose of the loss-making firms, a resolution expected to heighten political temperatures in the emotive sector.

On Tuesday, the Privatisation Commission advertised for consultancy services on the matter.

Other than the five companies, the commission also re-advertised for consultancy services on the privatisation of Agro-Chemical and Food Company Ltd.

“The consultant is expected to guide the privatisation process including the period, price, legal and business issues of the sugar companies,” Privatisation Commission Chief Executive Officer Joseph Koskey told the Nation.

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Mr Koskey further said that the government had resolved legal bottlenecks and other administrative issues that had delayed the process.

If everything goes as planned, the sugar companies will be sold within 120 days after May 14, when the tender closes.

As part of the plans to privatise the sugar firms, the government intends to write off Sh38.5 billion in debts.

Late last month, Council of Governors chairperson Wycliffe Oparanya promised that the team was ready to hand over the report to President Kenyatta. But it is yet to do so weeks after finalising it.

The 14-member task force was formed after President Kenyatta issued a directive during last year’s Mashujaa Day celebrations in Kakamega County.

TAXES

Other members of the task force are sugar-belt region governors Okoth Obado (Migori) and Kisumu’s Anyang’ Nyong’o, Mrs Omondi and Bernard Otieno, two representatives for public millers and two representatives for private ones.

The Nation investigations show the government will face challenges in seeking to sell the companies as some of them have more liabilities than assets.

In December last year, Kenya Revenue Authority (KRA) announced that the sugar mills owed Sh17.1 billion in taxes.