Home ECONOMY Team seeks more talks on sugar factories lease terms

Team seeks more talks on sugar factories lease terms

by biasharadigest

Team seeks more talks on sugar factories lease terms

A forklift loads cane into a tractor
A section of Miwani Sugar Company. FILE PHOTO | NMG 

Sugar sector players in Kisumu want the tendering deadline for the leasing of five State-owned factories extended to allow for further consultations on the terms of reference for prospective investors.

The stakeholders, at a meeting on Monday constituted a committee comprising experts, farmers, union leaders, transporters, workers and representatives from cooperatives tasked to seek clarity on the lease document.

The team is expected to present recommendations to the Ministry of Agriculture through Muhoroni MP Onyango K’oyoo.

Chemelil Sugar Company, South Nyanza Sugar Company, Nzoia Sugar Company, Miwani and Muhoroni, both which are already under receivership are the five factories slated for leasing.

The government last week invited investors with experience in the global sugar industry through a notice in the local dailies by the Director-General of Agriculture and Food Authority.


The deadline for submission of the expression of interest is August 3 and bidding documents will be opened the following day.

Led by Mr K’Oyoo, the stakeholders associated with Miwani, Muhoroni and Chemelil sugar factories said the period allowed was too short to identify and get a credible leasee.

“The period is too short, especially for international investors, unless somebody has a predetermined investor he is pushing for. We want the period extended for us to get the best for our factories,” said Mr K’oyoo.

“We agree to the new concept of leasing but the process must be very transparent. We do not wish to deal with phantom companies floated by individuals from within purporting to come from outside,” said the Muhoroni MP.

The resolutions were made on Monday afternoon at Nyang’oma Youth Resource centre at a forum convened by Mr K’Oyoo to chart the way forward on the proposed leasing and development of the state-owned sugar millers.

Another resolution reached at the meeting was that the lease period be reviewed downwards from 25 years.

On July 2, Agriculture Cabinet Secretary Peter Munya announced a raft of measures the government was putting in place to revive the sugar sector.

They included writing off debts of State-owned mills and out-grower institutions, stopping the importation of brown sugar and privatisation of the factories through a long term lease model of at least 20 years.

“The leasehold period should be reduced to 10 years. We must have a clause that allows for revocation of the contract should stakeholders feel that we are not getting value,” said Mr Noah Opiyo, the Secretary of the Kenya National Federation of Sugar cane farmers, Muhoroni Branch.

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